Sealed Air (SEE) Q3 2024 earnings summary

Executive summary

• The company reorganized into Food and Protective verticals with new leadership to enhance customer focus and drive long-term strategy, supported by board enhancements and a cost take-out program targeting $90M–$160M in savings.

• Food segment delivered above-market growth and share gains across regions, while Protective faced continued volume softness but gained traction with sustainable packaging and key partnerships.

• Adjusted EBITDA for Q3 2024 was $276M, down 3% year-over-year, with margin improvement driven by cost reductions and operational excellence initiatives.

• Net leverage ratio improved to 3.7x, with a focus on deleveraging and strong free cash flow generation.

• Hurricane Helene and other operational disruptions had minimal impact on quarterly results due to rapid response.

Financial highlights

• Q3 2024 net sales were $1.35B, down 2.7%–3% year-over-year; adjusted EBITDA was $276M (20.5% margin), down 3%.

• Adjusted EPS rose 2.6%–3% to $0.79; GAAP net earnings increased 54%–62% to $88.7M–$91.7M; diluted EPS up 52.5%–61.5% to $0.61.

• Free cash flow year-to-date reached $322.7M–$323M, up from $23.9M–$183M last year, driven by lower tax and incentive payments.

• Net debt at quarter-end was $4.1B–$4.15B; total liquidity stood at $1.4B, including $386M in cash.

• Net leverage ratio at quarter-end was 3.7x, with a target below 3.5x by end of 2025.

Outlook and guidance

• 2024 net sales expected at $5.375B–$5.425B; Q4 sales expected at $1.38B with slight volume improvement in both segments.

• Adjusted EBITDA guidance for 2024 is $1.09B–$1.11B; adjusted EPS guidance raised to $3.00–$3.10.

• Free cash flow guidance midpoint increased to $400M, with outlook of $350M–$450M.

• Protective volumes expected to remain soft in Q4 and into 2025; Food to continue driving growth.

• 2025 outlook to be updated in February after further operationalization of verticals.