Ted Doheny
Chief Executive Officer at Sealed Air
Thank you, Brian, and thank you for joining our call. Today we will discuss our second-quarter results and provide updates on our 2023 outlook and our continuous journey to Reinvent SEE from the best-in packaging to world-class company, automating sustainable packaging solutions. We are introducing a new program called cost takeout to grow as part of our Reinvent SEE 2.0 to return to growth and take-out our cost in this challenging post-COVID environment. After that, we'll open up the call for your questions.
Starting with slide three. On this chart, we show our adjusted EBITDA performance since 2017 through the lens of major episodic events. The chart recaps where we are today, but most importantly, where we are going and how we are repositioning for future growth. We'd like to give you visibility to what we see for 2024 through 2025 and set the stage for our Cost Take-Out to Grow program.
As we entered 2018, we were faced with major challenges such as the startup war on plastics and remaining stranded costs after the Diversey sale. The company's operating leverage and earnings power were not where we wanted it to be and our stock price had been stagnant for the previous three years. That was the case correction to launch our Reinvent SEE program based on our four Ps. We established the SEE operating model, setting the tone for our transformation to world-class. The Reinvent SEE growth strategy centered on the pillars of automation, digital and sustainability. Through Reinvent SEE, we realized annual savings over $300 million margin expansion, greater than 270 basis-points and 5% topline growth, including M&A.
In early 2020, COVID shook the world and profoundly impacted the way of life globally. COVID brought demand surges in e-commerce and food retail, caused wide supply-chain disruptions, rapid inflation, product shortages and overstocking. We built Reinvent SEE aiming to become world-class based on our four Ps; people, performance, products, processes and sustainability.
Last quarter, we introduced our new SEE corporate brand, highlighting our transformation into an automation, digital and sustainability packaging solutions company. We are now evolving Reinvent SEE 2.0 to growth and expand the Cost Take-Out and productivity program to $140 million to $160 million of annual savings to be fully realized by the end of 2025. This Cost Take-Out to Grow program will redirect SEE resources from crisis problem solving to focus on driving major growth opportunities.
We are transforming SEE go-to-market team to an efficient and effective solutions focused organization accelerating automation across our business verticals and launching new product innovations enabled by sustainable materials and digital solutions. We will increase the operating leverage and earnings power in the business by further optimizing our supply-chain footprint and driving digitally-enabled SG&A productivity improvements. Bringing it altogether with our Cost Take-Out to Grow, we are targeting low-single digit growth, fueling our SEE Operating Engine, which will result in margin expansion in our journey to world-class.
Now moving to slide four. We'd like to showcase how we're creating high-quality growth. We break-down our growth by geography, market, product, and MySEE, our online digital platform. In the second-quarter, our digital online transactions grew to 16% of total company sales, representing a sequential increase from approximately 10% in Q4 of 2022 and approximately 14% in Q1 of 2023. This rapid growth reflects the speed of our digital transformation, our ability to adapt to changing needs of our customers, enabling us to serve customers we are not efficiently reaching today.
Towards the bottom of the slide, you can see the current percent of online transactions for each of our business verticals. Our largest penetration is in our automated Protective Solutions business. Starting with consumer ready solutions, representing over 50% of total revenue, these solutions are designed to meet the evolving needs of food processors, retailers and brand owners as they seek to respond to shifting consumer preferences and to create an at-home experience. In the second-quarter, consumer ready solutions declined low-single digit in volume, primarily driven by softer demand in our processors and food retail end-markets.
The rapid increase in inflation over the past several quarters has impacted discretionary spending, resulting in decelerating market demand. Consumers are trading down from premium to lower-priced proteins. This dynamic impacted all regions with EMEA being hit the hardest. SEE Automation solutions for proteins continue to be a bright spot and grew approximately 40% from strong share gains with major meat processors in the quarter. Despite the softer global protein market, Automation grew double-digits in all regions, with APAC showing the strongest momentum growing greater than 50%.
Throughout 2023 and into 2024, we expect the retail softness to continue. The US cattle cycle will be a headwind for the business, partially offset by tailwinds from the Australian herd cycle which already positively impacted our business. Automation will continue to be a secular driver across all these markets.
The next business vertical, fluids and liquids, now representing greater than 10% of company's sales in the quarter, experienced mid-single-digit growth, before accounting liquibox. We continued to see the modest food service recovery and strong growth in automation. We're bringing medical into this business vertical, further capturing the synergy between Cryovac's materials science and liquibox fitments and attachment technologies.
Our third business vertical is our Automated Protective Solutions, which represents approximately 35% of our business today, focusing on a variety of markets and customers, ranging from industrial to e-commerce fulfillment. Weak end-market demand and channel destocking continue to impact volume performance in the quarter. We're focusing our efforts on turning around this vertical by expanding SEE automation capabilities and fiber-based solutions. We're increasing engagement and reaching more customers through our MySEE digital platform, now representing approximately 35% of this vertical's revenue. We're actively performing a strategic review of our Protective portfolio for further areas to optimize and unlock value. As a small example, we recently-announced the closure of our thermal temperature assurance business.
Transitioning now to slide five. We delve into SEE's growth pillars, namely automation, digital and sustainability, all crucial and addressing our customers' most pressing packaging challenges. During the second-quarter, we reached new significant milestones, demonstrating our commitment to our customers in delivering incremental value-add capabilities to enable profitable growth for SEE. Automation exhibited robust growth for the quarter increasing by approximately 20%. Food automation was particularly strong, up approximately 40% year-over-year from continued market-share gains at major protein producers. We anticipate delivering over $525 million, up 10% in annual rent revenue this year.
With regards to digital solutions, we achieved several significant milestones. As an example of how digital printing is fueling SEE automation, we introduced a new prismiq digital printer unit to print protein bags at our customers' facilities, enabling them to customize their products at the point of packaging. Transactions on MySEE platform surpassed $1 billion annual run-rate in the second-quarter, demonstrating robust digital engagement. Following the successful introduction of our online design studio, onboarded customers experienced high-speed web-to-print solutions, streamline graphics process and reduced print lead times. As we move more of the company online, we continue to unlock operational efficiencies, reach new customers and make it easier to do business with SEE.
On the sustainability front, we're proud to share that our MSCI and Sustainalytics ratings have improved, recognizing our ESG progress. Back in July, together with ExxonMobil, Australia, we announced a unique circularity initiative for protein trays. The collaboration will avert more than 900 tons of plastic waste annually from landfills or incineration. We take great pride in the industry partnerships we've created to deliver scalable and sustainable solutions, making our world better than we find it.
Turning to Slide six. This is another example of how the combination of best-in class Cryovac auto pouch equipment and film, liquibox dispensing technologies and prismiq digital connectivity bring value and create customer returns. On the top-right hand side of the slide, you see the use of Cryovac technology Barrier Bags filling lemonade within a quick-service restaurant environment. This automated form fill and seal solution enables greater than two times operational efficiency and over 30% waste reduction compared with traditional, back of the store, lemon slicing and squeezing, improves speed-of-service, reduces storage requirements, enhances safety, while offering a seamless source of fresh lemonade throughout a given day.
In this example, the operational savings were over $10 million for the customer. We're introducing a new solution designed not only to bring additional operational savings, but also create new revenue sources for QSR brand owners. A prefilled Fresh lemonade bag in the box can replace carryout rigid plastic jugs for quick-service restaurants. This growth opportunity for our customers, extend shelf-life from hours to days, enables in-store retail carryout formats and digital marketing opportunities to enhance consumer experience. This application will disrupt rigid containers with an improved sustainability profile through less and more efficient packaging.
Now, I'd like to turn the call over to Dustin to review our financial results. Dustin?
