Reinvent SEE strategy to drive profitable growth and earnings power
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Driving growth with leading brands and packaging innovations for Fresh
Food and e-Commerce
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Increasing operating leverage target above 40% per year beginning in
2019
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Embedding SEE Operational Excellence across entire company
New restructuring program to transform SEE into highly efficient company
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Total annualized savings expected to be $215 to $235 million by end of
2021
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Costs of program estimated to be $190 to $220 million, with less than
three-year payback
Company Website:
http://www.sealedair.com
CHARLOTTE, N.C. -- (Business Wire)
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/
Contacts:
Investors:
Lori Chaitman, 704-503-8841
or
Media:
Julianna
Jacobson, 571-236-4256
Source: Sealed Air Corporation
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