Sealed Air Q1 2025 Earnings Report

Sealed Air EPS Results

• Actual EPS: $0.81
• Consensus EPS: $0.67
• Beat/Miss: Beat by +$0.14
• One Year Ago EPS: $0.78

Sealed Air Revenue Results

• Actual Revenue: $1.27 billion
• Expected Revenue: $1.27 billion
• Beat/Miss: Beat by +$5.47 million
• YoY Revenue Growth: -4.40%

Sealed Air Announcement Details

• Quarter: Q1 2025
• Date: 5/6/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, May 6, 2025
• Conference Call Time: 10:00AM ET

Sealed Air (NYSE:SEE) provides packaging solutions in the Americas, Europe, the Middle East, Africa, Asia, Australia, and New Zealand. It operates through two segments, Food and Protective. The Food segment offers integrated packaging materials and automation equipment solutions to provide food safety, shelf life extension, reduce food waste, automate processes, and optimize total cost for food processors in the fresh red meat, smoked and processed meats, poultry, seafood, plant-based, fluids and liquids and cheese markets under the CRYOVAC, CRYOVAC Grip & Tear, CRYOVAC Darfresh, LIQUIBOX, Simple Steps, and Optidure brands. This segment sells its solutions directly to customers through its sales, marketing, and customer service personnel. The Protective segment provides shrink films, bagging systems, foam, inflatable, and suspension and retention packaging solutions to protect goods to e-commerce, consumer goods, pharmaceutical and medical devices, and industrial manufacturing markets under the SEALED AIR, BUBBLE WRAP, AUTOBAG, Instapak, and Korrvu brands. This segment sells its solutions through supply distributors, as well as directly to fabricators, original equipment manufacturers, contract manufacturers, logistics partners, and e-commerce/fulfillment operations. The company was incorporated in 1960 and is headquartered in Charlotte, North Carolina.

Sealed Air Q1 2025 Earnings Call Transcript

Key Takeaways

• Sealed Air has completed a major transformation by realigning into two market-focused businesses—Food and Protective—integrating supply chains, and enhancing leadership to drive improved fundamentals and faster customer responsiveness.
• Despite evolving global trade policies, the company’s largely domestic production and USMCA exemptions have resulted in a minimal net tariff impact, with supply-chain optimization and targeted pricing actions mitigating inflationary pressures.
• The Food segment delivered modest volume growth and a 23.8% EBITDA margin, led by low-single-digit gains in case-rate solutions and a resilient retail focus that positions Cryovac well for any protein trade-downs.
• Protective volumes were down in Q1 due to prior-year churn, but a North American go-to-market reorganization, EMEA stabilization (-1% volumes), and Asia growth signal early traction and a sequential improvement ahead.
• Q1 results beat expectations with net sales of $1.27 billion (-2% cc), adjusted EBITDA of $276 million (+2% cc) and EPS of $0.81 (+9% cc), and the full-year 2025 guidance was reaffirmed alongside plans for further cost control, productivity gains and deleveraging.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Sealed Air Q1 twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone.

[Operator]

You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today, Mark Stone.

[Mark Stone, VP - Investor Relations at Sealed Air]

Thank you, and good morning, everyone. This is Mark Stone, Sealed Air's Vice President, Investor Relations. With me today are Dustin Simak, our President and CEO and Ronnie Johnson, our Interim CFO. Before we begin our call, I would like to note that we have provided a slide presentation to supplement today's discussion. This presentation, along with our first quarter earnings release, is available to download from our Investor Relations page on our website at sealedair.com.

[Mark Stone, VP - Investor Relations at Sealed Air]

I would like to remind everyone that during today's call, we may make forward looking statements, including our outlook or estimate for future periods. These statements are based solely on information that is currently available to us. Please review the information in the forward looking statements section of our earnings release and slide presentation. These sections also apply to this call. Our future performance may differ due to a number of factors.

[Mark Stone, VP - Investor Relations at Sealed Air]

Many of these factors are listed in our most recent filings with the SEC. Additionally, we will discuss financial measures that do not conform to U. S. GAAP. Information on these measures and their reconciliation to U.

[Mark Stone, VP - Investor Relations at Sealed Air]

S. GAAP can be found in our earnings release or the appendix of our slide presentation. I will now turn the call over to Dustin and Ronnie. Operator, please turn to slide three. Dustin?

[Dustin Semach, President & CEO at Sealed Air]

Thank you, Mark, and thank you all for joining us for our first quarter earnings call. Today, will discuss the progress we are making on our transformation, give an update on current market conditions, including our response to the recent trade policies, and walk through how we will navigate the second half. Over the last year, have been fixing the foundation of the business by reorganizing back into two market focused businesses, Food and Protective. We recently completed the last major step by integrating our supply chains, including our planning and production back into each business. This now aligns all our commercial, innovation and supply chain teams all the way down to the respective end markets, putting us in a better position to serve our customers.

[Dustin Semach, President & CEO at Sealed Air]

This is especially important in periods of volatility. Now each business is better positioned to adapt quickly to their unique market dynamics and customer needs. With clear accountability and incentive alignment, we continue to see improvements in fundamentals throughout each business. In parallel, we continue to enhance leadership across the organization with a strong orientation towards growth and ownership mindsets. I'm confident the actions we are taking continue to better position each business for long term sustainable growth and will help us successfully navigate the uncertainty ahead of us.

[Dustin Semach, President & CEO at Sealed Air]

Before I give updates on each segment, I would like to address the dynamic macro environment we continue to operate in, focusing on the changing global trade landscape and subsequent tariff impacts. Since our discussion in February, the landscape has continued to evolve, with our focus first on potential tariffs in Canada and Mexico, then on broader reciprocal tariffs, including China. As a reminder, we are largely domestic production for domestic consumption, which positions us well against direct tariffs. In addition, most of our products are exempt under USMCA, which has put us in better position on direct impacts since February, as The U. S.

[Dustin Semach, President & CEO at Sealed Air]

Has shifted its focus to the rest of the world. Since November, we have been actively reviewing our supply chain and optimizing production and procurement to mitigate potential tariffs and minimize inflation. Where we have exposure that cannot be mitigated, we are actively taking pricing actions, largely in food. At this point, based on current policy, the net tariff impact to our bottom line is minimal and reflected in our outlook. More importantly, we are assessing the downstream impact on our customers' businesses driven by a potentially weakening demand environment.

[Dustin Semach, President & CEO at Sealed Air]

In Protective, we are closely monitoring consumer and industrial sentiment and the potential knock on effects in our fulfillment and industrial end markets. Food is a more resilient business in any economic cycle. With that said, we are continuing to monitor for protein trade downs and trade outs if the consumer comes under more pressure to ensure we are adapting to our customer needs and mitigating mix impact. We are working closely with our top customers and distribution partners to better understand the impacts on their businesses and how we can help them navigate the volatility in the market. While there is some indication of softness in the market to come, the trade policies are still not settled and it's too early to be definitive on the second half.

[Dustin Semach, President & CEO at Sealed Air]

Lastly, as the trade policies continue to evolve, we are assessing areas where our global footprint across both businesses could put us at an advantage relative to our competitors' footprints, creating opportunities to win further share. For now, we are contemplating tariffs that are in effect and some modest volume softness in both businesses, driven by our customers' cautiousness in this environment. This is offset by an improved FX outlook due to a weakening U. S. Dollar.

[Dustin Semach, President & CEO at Sealed Air]

We are taking further cost control and productivity actions in the second half to help offset potential further volume softness and or drive increased operational leverage. As a result, we are being prudent in reconfirming our full year guidance, which continues to contemplate tariffs in effect and our mitigation efforts related to them. As we progress through the second quarter, we expect to gain more visibility into trade policies and market demand and the impact of our mitigation actions. We will now move to each of our market focused business segments. During the first quarter, our Food segment delivered modest volume growth against a strong first quarter last year that benefited from carryover demand.

[Dustin Semach, President & CEO at Sealed Air]

As part of our go to market strategy within food, we are focused on taking market share in our retail end markets. Our case rate solutions grew low single digits in the first quarter compared to prior year. Our strategy in accelerating growth in retail allows us to capitalize on market trends where consumers are looking to replace dining out and on demand food delivery service with grocery store spend, creating a balanced opportunity between away versus at home consumption. Further, end user shifts from processed and frozen foods towards fresh foods benefits the retail market. Putting this together, this portion of the business is expected to continue to perform throughout the back half of the year, benefiting from evolving consumer preferences and the strength of our product offerings.

[Dustin Semach, President & CEO at Sealed Air]

Industrial food processing markets were relatively flat in the first quarter compared to last year. The South American cattle cycle remains strong. In Australia, the cycle remains near peak levels, which is now expected to last through 2027, given favorable weather patterns and growing export demand. Within The US, the beef market was slightly better than expected and offset by weaker pork and turkey markets. Cattle herd sizes continue to hover around fifty year lows, though changing consumer sentiment and weakening spending may reduce demand for premium beef cuts and reaccelerate herd rebuilding.

[Dustin Semach, President & CEO at Sealed Air]

We continue to pursue growth opportunities within our fluids business as we move towards the summer season when many of our fluid solutions are in peak demand. Dairy is a growing end market, particularly in Europe, Australia, New Zealand, which is creating opportunities in both cheese and milk packaging applications. Looking forward, we expect our food end markets to be stable outside of China and The US, which are operating in a higher period of volatility due to the trade environment. While some large industrial food processor in The US are indicating potential trade downs away from premium beef, based on our current volumes, we are not seeing trade downs and trade offs in our US business at this point in time. However, if we do see mix shift, Cryovac's portfolio covers a wide range of fresh proteins across the trade down spectrum from ground beef, poultry, and smoked and processed proteins, putting us in position to move with the consumer.

[Dustin Semach, President & CEO at Sealed Air]

I'm confident our food business continues to be well positioned to fully achieve its underlying long term potential. It is a longer cycle business that has previously demonstrated strength and resilience in this prior economic cycles. Transitioning to Protective. Our first quarter performance was in line with our expectations. Throughout the first quarter and into early weeks of the second quarter, we did not see significant shifts in order patterns or buying behaviors.

[Dustin Semach, President & CEO at Sealed Air]

Turning to market trends in Protective. As a reminder, approximately 60% of our product offerings largely serve the industrial end markets. Overall, industrials are proceeding with caution in the current low visibility environment, with PMI hovering around 50 and trending down as we approach the end of the quarter. The remaining 40% of the protective portfolio primarily serves fulfillment end markets where sentiment is weakening. Box shipments in The U.

[Dustin Semach, President & CEO at Sealed Air]

S, our largest market, were down low single digits in the first quarter, coupled with declining consumer confidence throughout the quarter. As I mentioned in February, the protective turnaround will take time to realize. However, I'm encouraged by the progress we are making on our transformation. The reorganized North American go to market team has now been in place for over a quarter with our investment in field sales now fully ramped. By strengthening our customer distribution relationships, we are gaining better insights into their needs in the state of our end markets.

[Dustin Semach, President & CEO at Sealed Air]

We remain confident that our revised go to market approach will continue to increase customer satisfaction, reduce churn, and improve our right to win in the market. As a proof point, we minimized large customer churn throughout 2024 and now fully lapped key customer losses from the beginning of last year, improving our prior year comparisons for the second quarter of twenty twenty five and beyond. While there may be headwinds on the horizon in our end markets, based on our transformation initiatives, we see headroom in the markets we serve to win back share lost over the last couple of years, with early signs of traction building throughout the first quarter. Following the success of the go to market reorganization in North America, we are now focused on enhancing our commercial organizations and market strategies in other key geographies. The reorganization has positioned the Protective team opportunities to drive efficiencies and effectiveness within the business, lowering our cost to serve, improving the speed of decision making, and increasing operational leverage.

[Dustin Semach, President & CEO at Sealed Air]

We are targeting to capitalize further on these opportunities in the second half of twenty twenty five. While the Protective business is short cycle and more sensitive to global trade dynamics versus food, we are heads down focused on controlling the controllables and improving fundamentals in the business. I'm confident that the actions we are taking continue to better position the business in the market. Before turning the call to Ronnie to review our first quarter financial results, I'd like to reiterate my confidence that as an organization, we are on the right path. Our priorities are unchanged and remain keeping the customer front and center, operating with urgency, driving further productivity, and transforming the business to deliver long term sustainable growth. Ronnie?

[Veronika Johnson, Interim CFO at Sealed Air]

Thank you, Justin, and good morning, everyone. Let's turn to slide four to review Steel Air's first quarter performance. The team executed well in the quarter and we came in ahead of expectations. Net sales were $1,270,000,000 in the quarter, down 2% on a constant currency basis. Adjusted EBITDA in the quarter was $276,000,000 up 2% on a constant currency basis.

[Veronika Johnson, Interim CFO at Sealed Air]

Adjusted earnings per share in the quarter of $0.81 was up 4% as reported and 9% on a constant currency basis compared to a year ago. Our adjusted tax rate was 25.7% compared to 25.9% in the same period last year. Our weighted average diluted shares outstanding in the first quarter were 147,000,000. Turning to slide five. During the first quarter, volumes were down 2%, primarily on anticipated declines in Protective due to prior year business churn and continued softness in our Fulfillment and Industrial portfolios.

[Veronika Johnson, Interim CFO at Sealed Air]

Protective weakness was partially offset by modest volume growth in Food of less than 1%. Price was flat for the quarter, with Protective down 1%, fully offsetting marginal pricing gains in Food. First quarter adjusted EBITDA of $276,000,000 decreased $2,000,000 or less than 1% as reported and increased 2% on a constant currency basis compared to last year with margins of 21.7%, up 80 basis points. This performance was mainly driven by cost takeout and productivity efficiencies, partially offset by unfavorable net price realization. Moving to slide six.

[Veronika Johnson, Interim CFO at Sealed Air]

In the first quarter, food net sales of $852,000,000 were up 1% on an organic basis, primarily driven by pricing actions and formula pass throughs, combined with marginal volume growth due to continued growth in our CaseReady solutions. The protein markets overall were flat from prior year and slightly worse than our initial expectations. While The US beef slaughter was better than expected, this was more than offset by reductions in pork and poultry. From a regional perspective, volumes continued to grow in our EMEA, Latin American and Australian businesses, partially offset by flattish volumes in North America and declines in Asia. Food adjusted EBITDA of $2.00 $3,000,000 in the first quarter was up 7% as reported, or 10% in constant currency.

[Veronika Johnson, Interim CFO at Sealed Air]

Adjusted EBITDA margin was 23.8%, up 200 basis points compared to last year. The increase in adjusted EBITDA was mainly driven by productivity and cost takeout savings, partially offset by unfavorable net price realization. Protective first quarter net sales of $420,000,000 were down 8% organically, driven primarily by volume declines of 6%, with growth in Asia and Latin America being more than offset by declines in other geographies, primarily North America. As a reminder, all of our large customer churn came from North America last year and will have fully wrapped in the second quarter. North America was where much of our transformation effort was initially focused, and we expect results in this region to improve throughout the year.

[Veronika Johnson, Interim CFO at Sealed Air]

EMEA continued to show signs of stabilization, having its best quarter since 2021, with volumes down just 1%. Protective adjusted EBITDA of $74,000,000 was down 18% in the first quarter as reported, or 16% on a constant currency basis. The adjusted EBITDA margin was 17.6%, down 180 basis points from the prior year. The year over year decrease in adjusted EBITDA was primarily attributable to lower volumes and unfavorable net price realization, partially offset by productivity and cost takeout savings. On a sequential basis, margin improved two eighty basis points compared to the fourth quarter, driven by continued productivity and cost takeout initiatives.

[Veronika Johnson, Interim CFO at Sealed Air]

Now let's turn to free cash flow and leverage on slide seven. Through the first quarter, cash flow was a use of $12,000,000 compared to a source of $78,000,000 in the same period a year ago. The primary driver of the anticipated use of cash was an increase in incentive compensation and tax payments, partially offset by lower interest payments. At the end of the quarter, our total liquidity position was $1,300,000,000 including $335,000,000 in cash and the remaining amount in a committed and fully undrawn revolver. Our net debt leverage ratio was 3.7 times, down from 3.9 times a year ago.

[Veronika Johnson, Interim CFO at Sealed Air]

We remain on track to drive net debt to adjusted EBITDA to approximately three point zero times by the end of twenty twenty six. Let's turn to slide eight to review our 2025 outlook. During the first quarter, we generated strong earnings against sales that were slightly ahead of our expectations as we navigated a shifting landscape, executed business fundamentals, and continued our ongoing efforts to turn around Protective. We continue to operate in a low visibility environment, especially in Protective, and anticipate we will have better visibility into how tariffs are impacting our end markets and the translation into second half performance during our next call. As Dustin mentioned, we are reaffirming our full year 2025 outlook ranges across sales, earnings and free cash flow.

[Veronika Johnson, Interim CFO at Sealed Air]

We see a softer volume outlook offsetting improved foreign currency in both food and protective, reflecting a slight shift in industrial and consumer sentiment. Foreign currency headwinds are now expected to be approximately 1% better than previously anticipated in our February outlook. Our net price realization assumptions across the total company remain relatively the same for the full year. Looking ahead to the second quarter, we anticipate a sequential increase in sales in both segments, reflecting an improving trend within the Protective Portfolio and more favorable turkey and pork outlooks than in the first quarter in Food. As a result, we expect second quarter net sales of approximately 1,300,000,000.0 adjusted EBITDA of $270,000,000 and adjusted earnings per share around $0.71 We remain committed to restoring underlying fundamentals by executing in the market, progressing our transformation, navigating the changing trade policy and deleveraging the balance sheet.

[Veronika Johnson, Interim CFO at Sealed Air]

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

[Operator]

Thank you very much. At this time, we will conduct a question and answer session. As a reminder, to ask your question, you will need to press 11 on your telephone and wait for your name to be announced. Our first call comes from the line of Ghansham Panjabi. Your line is open.

[Ghansham Panjabi, Senior Research Analyst at Baird]

Thank you, operator. Good morning, everybody. I guess first off, the comments tested on protective volumes as it relates to progress that you're seeing over the past year, if we kind of zoom out, that segment had seen volumes down on a year over year basis since the first quarter of 'twenty two. So I'd love to hear some color as to what specific progress you're referring to as it relates to how that business is unfolding. If you gave this, I missed it.

[Ghansham Panjabi, Senior Research Analyst at Baird]

But what were the volumes by vertical industrial versus fulfillment?

[Dustin Semach, President & CEO at Sealed Air]

Sure. Hey, Ghansham, and pleasure for the question and to talk to you today. So a couple of ways I'll qualify that. One is we talked about volume being down roughly, think of it as 6% kind of in Q1 and some pricing impact on top of that. And if you go back to the prepared remarks both in Ronnie's and my section and what we refer to is really around the wrapping effect of that churn.

[Dustin Semach, President & CEO at Sealed Air]

And just for context, the large customer churn kind of fully ran out. Think of this as a piece of this we would have talked about, which is like the fill air business with Amazon. That happened in Q1 of twenty twenty four was the last quarter. And so we've really minimized churn along the way. So no major customer churn since the first quarter of twenty twenty four.

[Dustin Semach, President & CEO at Sealed Air]

And you've seen that wraparound effect now starting in Q2, which you'll see a sequential improvement of roughly two points relative to year over year. So we're down, think of it as 6% volume, we'll be down 4%. Also, you go back to the commentary, if you look at if you go back to even 2021, '20 '20 '2, every region was down, pretty much every product line was down. Now you're talking about Asia showing growth, you're talking about EMEA stabilizing being down roughly one point and again, and you have LATAM growing as well. So really what we've narrowed it down to is really North America, which is where we've been spending our time.

[Dustin Semach, President & CEO at Sealed Air]

The piece around the positivity is around that minimization of churn. And a lot of the initiatives that we're doing when it goes back to the go to market reorganization, again, it's too early to call the ball, but the feedback we're getting relative to our distribution partners, our major customers and I mean directly as I'm spending time with it's been overwhelmingly positive in terms of our approach and going back to this whole getting closer to the customer, improving our service levels, improving business fundamentals, tackling kind of blocking and tackling and doing it better and it's working. And that's what we're seeing and you're going to see it in the Q2 guide right now relative to Protective. Going back to your question around Fulfillment and Industrials. Industrials have continued to our Industrial portfolio has continued to outperform our Fulfillment portfolio and has done so as well in Q1.

[Dustin Semach, President & CEO at Sealed Air]

But keep in mind, the churn that I'm referring to that's fully lapping. To give you an idea, you go to Q1, the net six number is down 4% in industrial, down 9% in fulfillment. But all of that large churn that we talked about in North America is in fulfillment, going back to the Philair business in Amazon. And so as you go forward, fulfillment gets a lot more positive, but it begins to perform similar to our industrials, then our industrials have been performing along the way and continue to improve. And so hopefully that answers the question, but we're quite positive about the progress we're making and that will give you some insight into how we're driving it.

[Operator]

Thank you very much. One moment for our next question. Our next question comes from the line of George Staphos from Bank of America Securities. Your line is open.

[George Staphos, Managing Director at Bank of America Merrill Lynch]

Hi, thanks everyone. Good morning. Thanks for the details. Dustin, I just wanted to talk to you a bit on how you're measuring your customer improvement and whether you're doing Net Promoter Scores or anything to that effect. And how you're managing that and how you're trying to improve your scoring with customers for all the right reasons, while at the same time you're taking out costs, is kind of a difficult balancing act, right? You're taking out, in some ways, people while also trying to improve your position with your customers. So how is that going? And then broadly, if you could give us a view relative to where you sit today versus say when you were talking about fourth quarter, would it be fair to say that protective is maybe trending a bit better than you would have expected relative to food or vice versa?

[George Staphos, Managing Director at Bank of America Merrill Lynch]

How would you have us think about that as we think about momentum in the second half? Thank you and good luck in the quarter.

[Dustin Semach, President & CEO at Sealed Air]

Yes. Thank you, George. And I appreciate the question. I'll give it to you in the three parts, right? So the first one is yes to customer satisfaction.

[Dustin Semach, President & CEO at Sealed Air]

If you think about going back even a year and a half ago, two years ago, that was really the starting point to really go out there and get our customers' feedback, which is something that had been lost along the way. And since then, we've repeatedly gone back and checked it. And beyond that, it's also just being out there in front of our distribution partners personally and with our customers and having our executive team be out in the field a lot more than they have been historically. And so the combination of those three things are what we think about customer scoring, that's absolutely there's an analytical side of it and then there's the softer side of it of just actually being out in the field. And in both cases, that's how we're getting the feedback today to make sure that we're certain that things are improving.

[Dustin Semach, President & CEO at Sealed Air]

And the answer would be so far, the answer is yes, it is improving. It's not where it needs to be. So I don't want to leave you with that. There's still a lot more work for us to do to continue to do that. And that will continue to happen through the efforts that we're talking about.

[Dustin Semach, President & CEO at Sealed Air]

On the balancing act, one of you go back to the prepared remarks, because it's a great question. This balance between how do you continue to drive effectiveness in the business and efficiencies while at the same time maximizing growth. And it really comes from the starting point. Do you think you're organized effectively, structured effectively? Are your processes effective?

[Dustin Semach, President & CEO at Sealed Air]

And so where are we focused? And if you go back to the prepared remarks, we've actually been investing back into protective sales. So we've been putting more feet on the street, particularly in North America over the past, I would say ninety days, has really started as part of our planning effort in Q4 and then we've executed across Q1. And this is really a restoration. If I go back to prior cycles, there was areas where we touched I go back to think of it as four or five years ago, where feet on the street were touched as part of some of the restructuring process.

[Dustin Semach, President & CEO at Sealed Air]

That's not been the case this time around. And it's really about trying to find efficiencies in other areas of the business. A perfect example of that is we shifted a significant portion of our back office operations to Manila. And as a result of that, we're able to take some of those savings and put it back into the field and still drive net leverage in the business. And so I still think there's plenty of opportunities across the business for us to become more effective and efficient.

[Dustin Semach, President & CEO at Sealed Air]

So it's not just about cost takeout for cost sake, but how do we actually drive that in a way that brings about organizational agility, speed of decision making, reducing spans and layers, getting us closer to the customer. So it doesn't have to be perceived as a negative or impaired growth. And then your question on the last and the third part around, is Protective trending better than I'd originally thought or is relative to food? And I would say, right now both businesses are kind of performing in line with our expectations kind of coming into the year. We talk about the backdrop in the second half, but these transformational efforts at Protective have been ongoing for the past year and they've been in waves of implementation and execution.

[Dustin Semach, President & CEO at Sealed Air]

And from that perspective, I feel good about where that's at. And keep in mind over the past couple of months, we've actually accelerated a number of those initiatives, But the benefits of that acceleration will happen more in the second half. So I feel good about if we go back to some of the language we've used around urgency and pace and how do we drive those improvements. So I do feel that's stepping up, but the strategy has been the same. It's just about how quickly we can pull forward those results. And that's what we're focused on.

[Operator]

Thank you. Our next call comes from Matt Roberts of Raymond James. Your line is open.

[Matthew Roberts, Equity Research Analyst at Raymond James Financial]

Hey, good morning, Dustin, Ronnie, Mark. Thanks for taking the question. On the price side, you noted that net price was relatively unchanged, but maybe in each segment, Protective, are you seeing any changes in the competitive landscape? Or how do you think about price for the year, particularly now that the areas where you saw churn are out of the portfolio? Similarly on food, any changes or impacts from underlying resins?

[Matthew Roberts, Equity Research Analyst at Raymond James Financial]

And it seems like everybody I listen to seems to be gaining share in food. So any changes in the competitive environment, how that impacts price through the rest of the year? Thanks for taking the question.

[Dustin Semach, President & CEO at Sealed Air]

Hey, Matt. Again, great question and I'll work through it step by step. So what we mean relatively unchanged, it really is like to give you an idea, we were down in our prior guidance down roughly 63%. Now we're down roughly negative 57%. So it's improved slightly, but really not material in the full year.

[Dustin Semach, President & CEO at Sealed Air]

And the composition actually by segment is pretty comparable as well. So if you remember going back to February, what we talked about is that a majority of the negative price realization is in protective for the reasons we've discussed in the past due to a lower for longer volumes environment in that business and just the competitive pressure, particularly in some of the areas like fill air, etcetera, where when Amazon decided to leave that business, created a lot of supply in the market and put pricing pressure in that business. And so that's and all of us, whether you're IPG or store pack, we're all feeling the effects of that decision. And so going back to so those dynamics really haven't shifted and they're kind of in line with expectation. There's no been real shift in direct material inflation, non direct material inflation.

[Dustin Semach, President & CEO at Sealed Air]

And if you get back to resins, specifically, what I would say is that and this maybe dives a little bit into that tariff conversation in terms of the questions around that, is that right now, particularly with the recent change in China where they made an exemption for polyethylene be able to freely trade without being tariffed. It really kind of PE is kind of settled out right now. And you're seeing maybe even some flattish kind of sequential movement right now, but it's still inflationary for the full year, which is baked into our formula pricing. So that's not really changed much. It hasn't been material impact.

[Dustin Semach, President & CEO at Sealed Air]

And with that change, you see the PE market kind of settled out because there was a period there where we were concerned there may be oversupply in The U. S. Market. Because just as a reminder for polyethylene, most of those are produced kind of domestic production for domestic consumption. The area where we are seeing some pressure is in specialties and a lot of those right now today are sourced outside of The U.

[Dustin Semach, President & CEO at Sealed Air]

S. And obviously with that could have some inflationary kind of indirect inflationary relative to tariffs. But so far, we have not really experienced that. We don't see an impact at least in Q2 at this point that's material. So those are the areas that and that's why net price realization right now is relatively the same.

[Operator]

Thank you very much. Our next call comes from Anthony Pettinari of Citigroup. Your line is open.

[Operator]

Anthony, your line is open. Stand by for our next call.

[Operator]

Our next question comes from Jeff Zekauskas of JPMorgan. Jeff, your line is open.

[Jeff Zekauskas, Analyst at JPMorgan Chase]

Thanks very much. Your sales were down year over year, but your gross margins expanded nicely. Why is that?

[Dustin Semach, President & CEO at Sealed Air]

Hey, Jeff, pleasure and good question. So there's a couple of things. If we go back to really to the prior year, we continue to drive productivity initiatives into the business and cost takeout, right. So if you go over the prior year, were kind of on track to obviously exceed the $150,000,000 1 hundred and 60 million dollars we talked about as our cost takeout program. We're on track this year for $90,000,000 And what you've seen is that a lot of that goes into cost of goods sold, right, in terms of focusing on improving our cost positions in the business in both businesses.

[Dustin Semach, President & CEO at Sealed Air]

And so that's been really the effort. So we've kind of talked about it over the past three or four quarters and we're continuing to focus on it. What we're doing now as we think about the second half is actually looking at and saying, okay, is there more opportunity in the business beyond the $90,000,000 that we really have baked into our outlook at this point in time? And that's where we're focused and that's what's been able to drive our improvements. And if you get into specifically why is that the case, it's optimizing production, optimizing scheduling, been able to try to minimize impactful of the supply base in terms of negotiation with suppliers and from a pricing standpoint.

[Dustin Semach, President & CEO at Sealed Air]

It's everything from network optimization. I mean, it's a whole swath of activity that we've been undergoing over the past year to really drive that outcome. But it's a great point and we've been really pleased with the outcome. So thank you for the question.

[Operator]

Thank you. The next question comes from Phil Ng from Jefferies. Phil, your line is open.

[Philip Ng, Managing Director at Jefferies Financial Group]

Hey guys, congrats on a solid quarter in a choppy environment. So Dustin, I guess, to kind of kick things off, can you give us a little more color on order patterns in April and May for Food and Protective? It sounded pretty steady, which is pretty encouraging, particularly on Protective. Appreciating it's a shorter cycle business. How much line of sight do you have?

[Philip Ng, Managing Director at Jefferies Financial Group]

And then certainly, you sell an element of that business through distribution, so that adds to element of visibility. But what are your channel partners saying as well?

[Dustin Semach, President & CEO at Sealed Air]

Yeah, so it's a great question. I would tell you that for the most part, whether you're in food or protective and you're talking to our end customers, their Q1s were in line with expectations in terms of their understanding and most people are focused on what does that mean for the second half. So we actually haven't seen going back to the prepared remarks, it was intentional in there Phil around we have our Q1 was really in line with expectations. We were ahead in a couple of areas. And then if you go to April and May, I mean May is obviously very early at this point, but April has been largely on track.

[Dustin Semach, President & CEO at Sealed Air]

I would say, the food business is where we're closely watching potential trade downs in that beef area has been a real close watch out and you've seen some of the large industrial processors begin to hone in on that in The U. S. But it's really a U. S. Specific commentary that I'm making that comment around.

[Dustin Semach, President & CEO at Sealed Air]

But so far Protective for April is in line with our expectations. And obviously, May is too early to call right now at this point, but we're quite pleased with where we're at. Now, that doesn't mean that we're not being cautious or being thoughtful about the second half. And going back to your question about distribution partners, the feedback I've gotten so far is that their Q1s were also kind of in line and on track. And April is kind of trending in line where they think it needs to be.

[Dustin Semach, President & CEO at Sealed Air]

And but again, I go back to it. They're also cautious about the second half and trying to figure out which industries may be affected and what does that mean to overall demand and what does it mean by geographical composition. Those are the areas that we're going be focused on the second half beyond what can we do to mitigate. So if you think about over the next couple of months, I think a lot of this will play out and we'll get a lot more visibility across the entire ecosystem, whether it's our distribution partners or ourselves directly or direct customers.

[Operator]

Thank you. Our next question comes from Michael Roxland of Truist Securities. Your line is open.

[Michael Roxland, MD - Equity Research at Truist Securities]

Yes. You, Dustin, Roni and Mark for taking my questions. And I'd like to echo the congrats on a good quarter despite the backdrop. Mike, Dustin, you mentioned that the protective turnaround is going to take some time to realize, and you've been working on it actually, it sounds like the last year or so. But in your transition to CEO, the board stressed that there's a sense of urgency around timing.

[Michael Roxland, MD - Equity Research at Truist Securities]

So given that you've been working on the protective turnaround for about a year, can you help us frame what the timing looks like on a go forward basis? Is it is it nine months, twelve months, eighteen months? And I'm realizing it's a delicate balance between expediency and ensuring, you know, that the changes you're making are the right ones, but just to try to get a sense of how help us frame how we should think about the protective changes and the timing for those changes to occur. And then one last one quick one, just realizing the protective has multiple portfolios across many geographies. Is it possible to separate some of those portfolios that you determine maybe are not core without negatively impacting the remainder of the business? Thank you.

[Dustin Semach, President & CEO at Sealed Air]

Hey, Mike, it's a great question. So a couple of things, because I'm going contextualize it in two ways, because you talked about the urgency and then you're balancing the commentary and the script around taking time to realize. So and then you're juxtaposing that also, what does that mean in terms of translating to results? So you got to park for the side to the second on the macro backdrop and some of those areas. So what's happened?

[Dustin Semach, President & CEO at Sealed Air]

The question is really, you go back to the transition to CEO and what have we been doing differently. We've really been focused on accelerating the transformation programs that we've had within that business. We talked about it in the script and we hit on a couple of different areas. But one of them is, again, talked about the North American go to market transition. The focus now is translating some of that benefit into our other geographic regions.

[Dustin Semach, President & CEO at Sealed Air]

That's an acceleration that's happened over the past say seventy days. And then if you go into this kind of idea of having a fit for purpose cost model to continue to drive effectiveness and efficiencies in the business, also giving us the ability to reinvest in growth and continue to maintain operational leverage as we work through the deleveraging the business from a volume perspective, that's also relatively new and also being accelerated as part of this effort. And then beyond that, just we've talked about it briefly, but some of the enhancements in our leadership, that piece of it continues to be underway. And I think that we'll be in a much better position, think of it over the next ninety days to six months. On the last piece, which we didn't really touch on the script, because a lot of that work is still ongoing and we've highlighted in the past is really around and I'll touch on your point about portfolio optimization.

[Dustin Semach, President & CEO at Sealed Air]

But when you think about this idea around the fiber side, how we're approaching mailers, how we're approaching our paper systems, how are we thinking about our APS business, particularly in our hybrid auto bagger, which we're bringing to market now over the summer. We feel really good about those areas and that portfolio relative to fulfillment and making sure that we're more substrate agnostic that we're making progress in that area. And that's an area of acceleration. So when you put those things together, and you think about the business overall holistically, we're already demonstrating that if you look at our procession of quarters that we have currently in our guide, you're already talking about being down roughly 6%, being down 4%. And that progression will continue throughout the second half.

[Dustin Semach, President & CEO at Sealed Air]

And we're still targeting that, take outside the macro backdrop for a second if there's something cyclical impact associated with that. But right now, and you're seeing that and that's why we'll go back to this approved point is that you're seeing some of these outcomes already being driven. And another highlight just to reiterate the commentary, which is on EMEA being the best quarter we've had since 2021. And while it's down one point, it's a significant improvement over the past, say two years. And our Asia business is growing.

[Dustin Semach, President & CEO at Sealed Air]

It's really North America that we're really focused on improving that bottom line. So to answer your last question around specifically the portfolio optimization, at this point in time and just as a reminder, we have we're still the largest protective packaging business in the world by a factor of almost two. And it's the breadth of our portfolio, the strength that drives the strength of our relationships and distribution. And we it's an area that at least at this point in time outside of the smaller things that we pruned, if you think about kebothermal business, if you think about temp guard, think about a couple of these areas that were smaller, we've already called out. We don't see large portfolio shifts at this point in time.

[Dustin Semach, President & CEO at Sealed Air]

We're really trying to optimize the business that we have, particularly in this current M and A environment.

[Operator]

Thank you very much. Our next question comes from the line of Josh Spector at UBS. Your line is open.

[Josh Spector, Executive Director at UBS Group]

Yes. Hi, good morning. I had just a couple of follow ups on Protective. First, can you say explicitly what your volume assumption is for the second half? I'm not entirely clear if you've updated that or you're saying you're going to update that next quarter relative to the 4% decline you're assuming in second quarter.

[Josh Spector, Executive Director at UBS Group]

And then somewhat related, I guess, with tariffs, I was just curious on the equipment side, how domestically sourced are those materials and parts? Or I guess, explicitly, much of that comes directly from China? Is that a risk on cost and delaying or pushing out some deployments for you guys?

[Dustin Semach, President & CEO at Sealed Air]

Josh, this is Dustin. The equipment question, just to be specific, are you talking about and protective or protective or both?

[Josh Spector, Executive Director at UBS Group]

I was asking more about protective, but if it's easy to answer for both, go ahead.

[Dustin Semach, President & CEO at Sealed Air]

No, it's okay.

[Josh Spector, Executive Director at UBS Group]

Whatever is fair to say.

[Dustin Semach, President & CEO at Sealed Air]

Yeah, so to be explicit about the second half, we're down about a point in volume in protective. And so going back to the question on equipment, So again, on the tariff piece of it, for the most part with the USMCA exemptions, that's largely significantly reduced our exposure to any potential direct tariff impacts. There are some in equipment, but we right now we see them as relatively immaterial and that we're able to manage through sourcing and changes that we can put in our supply chain. So at this point in time, we don't see a material impact in terms of being able to place or drive equipment sales outside the demand environment. And our equipment business just to answer the question directly, right now is still in line with our expectations.

[Dustin Semach, President & CEO at Sealed Air]

And just as a reminder for everyone holistically, it's about it rounds about $05,000,000,000 fifty-fifty between equipment sales and parts and service and split fifty-fifty between both businesses. And so and right now, the first quarter to give you a sense in both businesses, our book to bill is above one, kind of indicating some of the strength in the order intake. And so hopefully that answers the question. So quite positive about the outlook there.

[Operator]

Thank you very much. Our next question comes from the line of Gabe Hodgesi of Wells Fargo. Your line is open.

[Gabe Hajde, Analyst at Wells Fargo]

Dustin, Ronnie, good morning. Wanted to ask about margins and you guys kind of came in 100 bps above our model on a consolidated basis, maybe drilling in a little bit on food. That was where some of the outperformance was. And I appreciate that things can move around based on timing of resin recovery and raw material movements, etcetera. But just higher level, Dustin, as you look at the business and the value add that you bring to your customers, are you performing in line with where you would expect in that business? Was there anything peculiar in the first half of twenty five that would kind of prevent you from being in that range on a go forward basis? Thank you.

[Dustin Semach, President & CEO at Sealed Air]

It's a great question, Gabe. And again, what I would tell you goes back to some of the prior commentary. If you look at our guidance right now, I mean, we're expecting to be in the for the food business overall holistically and that, think of it as 23 points of margin range, which is obviously kind of in line with how we performed in 2025 and we demonstrated again in Q1. So I don't see really anything peculiar in either year that would not lead that to be long term sustainable margin growth. There is a or in terms of that 23 percentage point range, we get the question oftentimes about how much more leverage you're trying to drive in that business.

[Dustin Semach, President & CEO at Sealed Air]

And right now our focus has been really on growth. And so as you think about stepping that margin up that we don't really see it from here in terms of having like this long growth ramp relative to margin expansion unlike Protective where there's more room to run. And so right now we're focused on how do we find areas to step up our growth, kind of above market, which is where we've been performing kind of here recently in terms of market growth rates. Think of it as pre-twenty twenty four and 2025. And that's our focus right now.

[Dustin Semach, President & CEO at Sealed Air]

The question is, how we've been able to drive that? It goes back to some of the prior commentary. A lot of that is really just putting driving productivity in both the businesses and cost takeout. And there's nothing at least at this point in time that would indicate we're not able to do it. On a positive note as well, if you look at this year, our net price realization is while it's not positive or zero yet, it's still relatively low compared to prior year.

[Dustin Semach, President & CEO at Sealed Air]

So you're even seeing that gap begin to narrow, which obviously makes a lot easier, kind of managing the business going forward, where pricing kind of help offset a lot of that inflationary impact.

[Operator]

Thank you very much. Our next question comes from the line of Stefan Diaz of Morgan Stanley. Your line is open.

[Stefan Diaz, Vice President, Equity Research at Morgan Stanley]

Hi, Dustin, Ronny, Mark. Thanks for taking my question. So you originally, and I guess still do, sort of expect a second half recovery in protective volumes as you fully lap some of the customer churn that you mentioned earlier. But your original guide, I guess, was given before Liberation Day and before the escalation of The U. S.-China trade tensions.

[Stefan Diaz, Vice President, Equity Research at Morgan Stanley]

Maybe if you could just give us your thinking about sort of holding that guide and maybe to the extent you have visibility in your protective business, how much of your international protective exposure is for importation into The US? Thanks.

[Dustin Semach, President & CEO at Sealed Air]

Hey, Stephane, all great questions. So there's a couple things I will comment on this particular one. Keep in mind that when we talked about the outlook for the year, we are seeing some volume pressure in Protective and we've called that out. And the numbers I quoted already reflect that. So while the guide overall is intact, what you're really seeing is some modest volume softness based on what we can see already today and think of how that's going to cascade and proceed throughout the year.

[Dustin Semach, President & CEO at Sealed Air]

And then that's being offset by benefit in FX. And it's a moderated FX outlook is similar to others where we don't think the euro and so these other currencies will remain at the levels they're at today in terms of devaluation in terms of the U. S. Dollar weakening against them. And so that's kind of how the guide is constructed.

[Dustin Semach, President & CEO at Sealed Air]

And so you see some slight volume loss and kind of reductions in food and you see it some in protective, kind of reflecting that uncertainty in the marketplace being offset by an improved FX outlook. So in terms of international exposure, peering through this lens and really understanding protective packaging materials, what's coming in from importexport, how that eventually make it to the end user and what's being affected by, as an example, the reduction in potential Chinese imports into The U. S. That area is an area where we have limited visibility other than to say this, which is, if you think about our business, a majority of it is obviously in industrials, which is going to have far less exposure from that particular perspective. And keep in mind that most of our business outside of the import export is domestic production for domestic consumption.

[Dustin Semach, President & CEO at Sealed Air]

So it is hedged to some degree geographically from the tariff impacts themselves and the demand localized to those economies. And so right now, at this point in time, we haven't seen a change in buying patterns, change in order behavior, no living cautiousness relative to saying, hey, we could let's destock for a bit and wait and see what happens before we restock. We haven't seen any form of that at least at this point in time. And then going back to the prior commentary, because it's an excellent question. This is an area that we're going to continue to pressure test over the next two to three months to really understand if there's back half because going back to the prepared remarks, there is limited visibility in protective.

[Dustin Semach, President & CEO at Sealed Air]

It's not just for us, for us, our distribution partners. And to some degree, it's just diversification of the business geographically, product wise, and then just diversity and relative to customer base.

[Operator]

Thank you very much. Our next question comes from the line of Christopher Parkinson of Wolfe Research. Your line is open.

[Chris Parkinson, Managing Director & Senior Research Analyst at Wolfe Research, LLC]

Great. Thank you so much for taking my question. Can you just hit on a little bit on the trends that you're seeing in red meat markets? If you could just parse out international trends versus The U. S.

[Chris Parkinson, Managing Director & Senior Research Analyst at Wolfe Research, LLC]

And how that flows in not only to your second half assumptions, but also just intermediate to long term in terms of your competitive positioning. Thank you so much.

[Dustin Semach, President & CEO at Sealed Air]

Hey, Chris, all great questions. And so going back to some of the prepared commentary, I would say in general, market expectations have largely been the same, if you go back to February to today across the protein markets, with an exception of really in The US.

[Dustin Semach, President & CEO at Sealed Air]

And so in The US is where the question has been around The US beef cycle.

[Dustin Semach, President & CEO at Sealed Air]

In Q1, we had some a little bit of a flip where beef was better than we'd anticipated, Similar to last year where it kind of every quarter industrial food processor still taking advantage of market pricing, continuing to keep the herd low, but effectively slaughtering everything they could along the way where you've seen that dynamic kind of play out in Q1. But there was an offset this time relative to Turkey and to pork. We're going to see that reverse going back to the remainder of the year where we do believe that to come back and help offset some of that weakness that we do perceive to be in beef. And what we've talked about, going to the commentary, and you've seen this in some of the other industrial food processors where there is a perspective that with the impacts we're having potential on the consumer, it may put apply pressure on premium beef purchases and you start working your way down trade downs and trade outs, and working your way down that spectrum. We're well positioned to make sure to take share across those product lines.

[Dustin Semach, President & CEO at Sealed Air]

So, today we have great share across most of those areas. So it's not that we're not in position, but there is a potential mix impact that we would need to mitigate throughout the second half if those trade downs do occur. But again, it's The U. S. Market.

[Dustin Semach, President & CEO at Sealed Air]

If go to the international markets, the Australian beef cycle, Latin American beef cycle continue to be very strong. We are seeing some shifts in exporting. So if you think about as an example, in The U. S, you're seeing lower exports obviously to China, and you're seeing that demand being picked up by Australia, by Brazil and other geographies. But again, we're well positioned all these geographies that pick up that demand.

[Dustin Semach, President & CEO at Sealed Air]

It's just the big area that we're focused on is North America. And really looking at how this market plays out and because it does still being roughly 65% of the food business. It's hard for the other markets to offset it. But you go back to the commentary, this markets outside The US continue to perform incredibly well.

[Operator]

Thank you very much. Our next call comes from the line of Arun Viswanathan of RBC Capital Markets. Your line is open.

[Arun Viswanathan, Senior Equity Analyst at RBC Capital Markets]

Thanks for taking my question. Congrats on the Q1 there. I was just curious on the guidance. So it sounds like you guys kept guidance is understanding there is a lot of uncertainty out there, but I guess have you seen any slowdown maybe in food volumes you continue to outperform there. And maybe if I ask another way, in keeping the guidance as is, are you saying that there's maybe some pull forward or is it mainly just on that kind of 9% swing in volumes that you've kind of maintained your guide and just building in some conservatism?

[Dustin Semach, President & CEO at Sealed Air]

Yes, all great questions. And so a couple of things I would say. One is going back to the question around kind of the first quarter and then what we're seeing in the month of April and the question around pull forwards. There was, I would say in Q1, very minimal pull forwards, particularly in our Canadian business, where you saw some customers being concerned around the current tariffs that were impact. But this is really de minimis relative to the overall kind of performance for the company.

[Dustin Semach, President & CEO at Sealed Air]

And so in terms of slowdown overall, we haven't really seen a slowdown in the business other than I would say the concern around premium beef and those cuts and that's more of a recent phenomenon that we're looking out for. But in general, we haven't seen any material change. The concern on is really what's to come, right, relative to the economic outlook in the second half and what can we do to mitigate it if those outcomes do play out the way they may. And that's where we're focused right now. But this is the challenging part of where we sit today is just that the business itself for the first quarter as well as kind of heading into April has been performing really in line with expectations.

[Operator]

Thank you very much. Our next question comes from the line of Eldon Rodriguez of Mizuho Securities. Your line is open.

[Edlain Rodriguez, Equity Analyst at Mizuho Securities]

Okay. Thank you. Good morning, everyone. I mean, Dustin, a quick one for me. If we see supply chain and other costs increasing because of tariffs, do you believe like you position well to raise prices to pass through those costs?

[Edlain Rodriguez, Equity Analyst at Mizuho Securities]

Or do you think you need like stronger volume to be able to do that? And also which segments will have like an easier or harder time to pass through those costs?

[Dustin Semach, President & CEO at Sealed Air]

Again, I was waiting for the tariff question. I'm glad I got it here. And so the couple of things I would tell you around the tariff specifically is that in general with the change with USMCA being exempt, that really minimized our exposure across both businesses. There's more exposure in food and protective. But in general, right now, keep in mind our food business contractually in many cases, can push through the price if necessary.

[Dustin Semach, President & CEO at Sealed Air]

But we see it relatively minimal. I mean, I don't want to overplay the exposure we have in each business. Right now, it's relatively minimal in both food and protective. And as we mentioned in the script, we at this point in time believe we can mitigate whatever we need to do pricing actions and or supply chain actions. And that's the supply chain we've been have we've had in motion really since November and have really continued to focus on that over the past four or five months.

[Dustin Semach, President & CEO at Sealed Air]

The other area I'll leave you with is that the one that's kind of TBD play out, I think we got the question earlier, which is around how will resins play out for the full year. So we're highly focused there and managing that with our suppliers and seeing as an example, opportunities where we may be getting a particular specialty from another country, but they have assets in another country where can we get it produced there to help mitigate it as an example. Same thing for our equipment business, while there may be some impacts with this question came up earlier. We're looking at ways to source the different parts and components from other areas. And right now, point in time, we see a path in many of these cases to be able to do that.

[Dustin Semach, President & CEO at Sealed Air]

It's a question of when timing, etcetera. And also keep in mind that the trade policies themselves have evolved quite a bit already. And we expect that evolution to continue throughout the second half. To some degree, it's not quite stable yet. But anyways, I'll leave with that as we feel really good about in both cases.

[Dustin Semach, President & CEO at Sealed Air]

To your question around do we need the volume? The answer is no. Because in most cases, we're in a similar position relative to our competitors. And so if one has to price, we'll probably most likely see the market price.

[Operator]

Thank you very much. At this time, I am showing no further questions. I would now like to turn it back to Dustin Sinek for closing remarks.

[Dustin Semach, President & CEO at Sealed Air]

I'd like to thank everyone for joining us this morning. I look forward to updating you over the coming quarters on our ongoing transformation and how we will continue to successfully navigate the environment. We have weathered similar challenges before and learned lessons that made us more resilient and prepared. From navigating past economic cycles to the turbulence of COVID-nineteen, our business has demonstrated strength, resilience and adaptivity. This challenge is no different, and I'm confident that we will navigate the landscape accordingly.

[Dustin Semach, President & CEO at Sealed Air]

I'd to close by thanking the global Silidair team. You continue to focus on what's important, delivering outcomes for our customers day in and day out and each other. Thank you.

[Operator]

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

Participants

Executives

• Mark Stone, VP - Investor Relations
• Dustin Semach, President & CEO
• Veronika Johnson, Interim CFO

Analysts

• Ghansham Panjabi, Senior Research Analyst at Baird
• George Staphos, Managing Director at Bank of America Merrill Lynch
• Matthew Roberts, Equity Research Analyst at Raymond James Financial
• Jeff Zekauskas, Analyst at JPMorgan Chase
• Philip Ng, Managing Director at Jefferies Financial Group
• Michael Roxland, MD - Equity Research at Truist Securities
• Josh Spector, Executive Director at UBS Group
• Gabe Hajde, Analyst at Wells Fargo
• Stefan Diaz, Vice President, Equity Research at Morgan Stanley
• Chris Parkinson, Managing Director & Senior Research Analyst at Wolfe Research, LLC
• Arun Viswanathan, Senior Equity Analyst at RBC Capital Markets
• Edlain Rodriguez, Equity Analyst at Mizuho Securities