Reinvent SEE strategy to drive profitable growth and earnings
power
- Driving growth with leading brands and
packaging innovations for Fresh Food and e-Commerce
- Increasing operating leverage target
above 40% per year beginning in 2019
- Embedding SEE Operational Excellence
across entire company
New restructuring program to transform SEE into highly efficient
company
- Total annualized savings expected to be
$215 to $235 million by end of 2021
- Costs of program estimated to be $190
to $220 million, with less than three-year payback
Sealed Air Corporation (NYSE:SEE) today announced its Reinvent
SEE strategy to drive profitable growth and earnings power. SEE
Operational Excellence will focus on the following key areas: speed
to market for new innovations, SG&A productivity, product cost
efficiency, channel optimization and customer service
enhancements.
"Over the last several months, we conducted a thorough
assessment of our entire organization and the market opportunities
available across the global packaging industry. This assessment
confirmed that we are well positioned to continue delivering
organic growth above our core markets. It also reinforced the need
to grow market share and move into adjacent markets with greater
speed and efficiency, as we accelerate returns on our highly
differentiated innovations. Through our Reinvent SEE strategy, we
will transform Sealed Air into a company that delivers world-class
operating leverage performance," said Ted Doheny, President and CEO
of Sealed Air.
"By improving how we innovate, buy, make, and solve, we will
address our customers’ most critical packaging challenges, lead the
industry with sustainable solutions and make every customer a
reference. We will create long-term value for our shareholders
through consistent, profitable growth and increased earnings
power."
Reinvent SEE
The strategy focuses on four key initiatives:
Speed to Market on Innovations: Invest
in technology and resources focusing on new and existing
high-growth markets. This will double Sealed Air’s innovation rate
over the next five years.
SG&A Productivity: Simplify
structure to create a more nimble and efficient organization.
Product Cost Efficiency: Expand SEE
Operational Excellence across entire company by upgrading
end-to-end processes: innovate, buy, make and solve. Drive
continuous improvement in manufacturing and across Sealed Air’s
global network in areas such as procurement, conversion cost
productivity, materials yield and network efficiency.
Channel Optimization and Customer Service
Enhancements: Leverage Sealed Air’s extensive distribution
network to drive market share in existing and adjacent markets. The
Company will continue to invest in digital systems and processes to
improve cycle time and responsiveness.
Restructuring Program
New Three-Year Restructuring Program
The Board of Directors of Sealed Air has
approved a new three-year restructuring program (“New Program”) to
drive total annualized savings by the end of 2021 in the range of
$215 to $235 million. The total cash cost of the New Program is
estimated to be in the range of $190 to $220 million, which will be
incurred primarily in 2019 and 2020. The restructuring program
costs include: headcount related costs in the range of $110 to $125
million; other associated costs in the range of $70 to $85 million;
and capital expenditures of approximately $10 million.
Existing Restructuring Program
Sealed Air’s existing restructuring program,
largely related to the elimination of stranded costs, is expected
to be completed in 2019. The Company continues to expect
restructuring savings and cash restructuring payments associated
with this existing program to be approximately $25 million and $35
million, respectively.
Total Restructuring Programs
From 2019 to 2021, total annualized savings
from restructuring is estimated to be in the range of $240 to $260
million. Total cash restructuring payments and costs associated
with the restructuring programs are expected to be in the range of
$225 to $255 million over the same period.
In 2019, Sealed Air expects total annualized
savings to be in the range of $60 to $80 million, which includes
$25 million from the existing program, and total cash restructuring
payments and costs to be in the range of $115 to $135 million,
which includes $35 million from the existing program. Savings in
2019 are expected to be partially offset by currency headwinds and
inflationary costs.
About Sealed Air
Sealed Air Corporation is a knowledge-based
company focused on packaging solutions that help our customers
achieve their sustainability goals in the face of today’s biggest
social and environmental challenges. Our portfolio of widely
recognized brands, including Cryovac® brand food packaging
solutions and Bubble Wrap® brand cushioning, enable a safer and
less wasteful food supply chain and protect valuable goods shipped
around the world. Sealed Air generated $4.5 billion in sales in
2017 and has approximately 15,000 employees who serve customers in
122 countries. To learn more, visit www.sealedair.com.
Website Information
We routinely post important information for
investors on our website, www.sealedair.com, in the Investors
section. We use this website as a means of disclosing material,
non-public information and for complying with our disclosure
obligations under Regulation FD. Accordingly, investors should
monitor the Investors section of our website, in addition to
following our press releases, SEC filings, public conference calls,
presentations and webcasts. The information contained on, or that
may be accessed through, our website is not incorporated by
reference into, and is not a part of, this document.
Forward-Looking Statements
This press release contains “forward-looking
statements” within the meaning of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 concerning our
business, consolidated financial condition and results of
operations. Forward-looking statements are subject to risks and
uncertainties, many of which are outside our control, which could
cause actual results to differ materially from these statements.
Therefore, you should not rely on any of these forward-looking
statements. Forward-looking statements can be identified by such
words as “anticipates,” “believes,” “plan,” “assumes,” “could,”
“should,” “estimates,” “expects,” “intends,” “potential,” “seek,”
“predict,” “may,” “will” and similar references to future periods.
All statements other than statements of historical facts included
in this press release regarding our strategies, prospects,
financial condition, operations, costs, plans and objectives are
forward-looking statements. Examples of forward-looking statements
include, among others, statements we make regarding expected future
operating results, expectations regarding the results of
restructuring and other programs, anticipated levels of capital
expenditures and expectations of the effect on our financial
condition of claims, litigation, environmental costs, contingent
liabilities and governmental and regulatory investigations and
proceedings.
The following are important factors that we
believe could cause actual results to differ materially from those
in our forward-looking statements: global economic and political
conditions, currency translation and devaluation effects, changes
in raw material pricing and availability, competitive conditions,
the success of new product offerings, consumer preferences, the
effects of animal and food-related health issues, pandemics,
changes in energy costs, environmental matters, the success of our
restructuring activities, the success of our financial growth,
profitability, cash generation and manufacturing strategies and our
cost reduction and productivity efforts, changes in our credit
ratings, the tax benefit associated with the Settlement agreement
(as defined in our 2017 Annual Report on Form 10-K), regulatory
actions and legal matters and the other information referenced in
the “Risk Factors” section appearing in our most recent Annual
Report on Form 10-K, as filed with the Securities and Exchange
Commission, and as revised and updated by our Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K. Any forward-looking
statement made by us is based only on information currently
available to us and speaks only as of the date on which it is made.
We undertake no obligation to publicly update any forward-looking
statement, whether written or oral, that may be made from time to
time, whether because of new information, future developments or
otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181213005848/en/
Investors:Lori Chaitman, 704-503-8841orMedia:Julianna Jacobson,
571-236-4256
Sealed Air (NYSE:SEE)
Historical Stock Chart
From Jun 2024 to Jul 2024
Sealed Air (NYSE:SEE)
Historical Stock Chart
From Jul 2023 to Jul 2024