Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - SEALED AIR CORP/DE | d265860d8k.htm |
 SEALED AIR UPDATE
BAML 2011 INDUSTRIALS CONFERENCE
DECEMBER 6, 2011
TOD S. CHRISTIE
TREASURER AND INTERIM CFO
WILLIAM V. HICKEY
PRESIDENT AND CEO
Exhibit 99.1 |
 1
SAFE HARBOR AND REGULATION G STATEMENT
•
This
presentation
contains
forward-looking
statements
within
the
meaning
of
the
Private
Securities
Litigation
Reform
Act
of
1995.
These
forward-looking
statements
can
be
identified
by
such
words
as
“anticipates,”
“believes,”
“plan,”
“assumes,”
“could,”
“estimates,”
“expects”
and
similar
expressions.
These
statements
include
comments
as
to
Sealed
Air
Corporation’s
(“the
Company”)
beliefs
and
expectations
as
to
future
events
and
trends
affecting
the
Company’s
business
or
the
successful
outcome
of
the
business
combination
with
Diversey
and
illustrative
or
pro
forma
combined
results.
Examples
of
such
forward-looking
statements
may
include,
but
are
not
limited
to,
expectations
regarding
the
potential
cash
tax
benefits
associated
with
the
W.R.
Grace
settlement,
potential
volume,
revenue
and
operating
growth
for
future
periods,
statements
about
the
benefits
of
the
business
combination
between
the
Company
and
Diversey,
and
the
Company’s
plans,
objectives,
expectations
and
intentions
with
respect
to
future
operations,
products
and
services.
For
more
extensive
information,
see
"Risk
Factors"
and
"Cautionary
Notice
Regarding
Forward-Looking
Statements,"
which
appear
in
our
most
recent
Annual
Report
on
Form
10-K,
as
may
be
revised
and
updated
from
time
to
time
by
our
Quarterly
Reports
on
Form
10-Q
and
Current
Reports
on
Form
8-K,
as
filed
with
the
Securities
and
Exchange
Commission.
While
the
Company
may
elect
to
update
forward-looking
statements
at
some
point
in
the
future,
the
Company
specifically
disclaims
any
obligation
to
do
so,
even
if
estimates
change
and,
therefore,
you
should
not
rely
on
these
forward-looking
statements
as
representing
our
views
as
of
any
date
subsequent
to
today.
•
Our
management
uses
non-U.S.
GAAP
financial
measures
to
evaluate
the
Company’s
performance,
which
exclude
items
we
consider
unusual
or
special
items.
We
believe
the
use
of
such
financial
measures
and
information
may
be
useful
to
investors.
We
believe
that
the
use
of
non-U.S.
GAAP
measures
helps
investors
to
gain
a
better
understanding
of
core
operating
results
and
future
prospects,
consistent
with
how
management
measures
and
forecasts
the
Company's
performance,
especially
when
comparing
such
results
to
previous
periods
or
forecasts.
For
important
information
on
our
use
of
non-U.S.
GAAP
financial
measures
and
information,
including
reconciliations
of
such
non-U.S.
GAAP
financial
measures
and
information
to
comparable
U.S.
GAAP
measures
and
information,
please
refer
to
the
financial
tables
that
appear
later
in
this
presentation.
1 |
 2
WHO WE ARE
We are focused on delivering consistent,
superior solutions in three areas:
Protecting what we eat and drink; where we shop,
learn, work, vacation and receive health
care; and
the valuable goods we ship. Our customers rely on these solutions
to improve safety, efficiency
and sustainability.
A COMPANY FOCUSED ON PROTECTION
2
FOOD SAFETY & SECURITY
FACILITY HYGIENE
PRODUCT PROTECTION |
 3
SOLID 3Q PERFORMANCE VS. COMPETITORS
3Q/2011 vs. 3Q/2010
performance
Sealed Air
Food Packaging
Segment
Competitor’s
Food Segment
Sealed Air
Protective Packaging
Segment
Protective
Packaging
Competitor
Segment Volume
Flat
Negative
(estimated -5%)
+3%
Flat
Segment Price/Mix
+4%
+7%
+3%
+3%
Adjusted Operating
Profit Margin
-30 bps to
14.2%
-190 bps to
9.8%
-90 bps to
13.4%
Flat at
2.0% |
 4
4Q PERFORMANCE REMAINS SOLID (DATA THRU
11/30/2011) Quarter to Date
Estimates
10/1/2011 to 11/30/2011
Key drivers vs. prior year
CONSTANT DOLLAR SALES VS. PRIOR YEAR PERIOD*
Food Packaging
+2%
•
+5% constant dollar sales in EU, Latin America, Asia
•
+1% constant dollar sales in North America
•
Only Australia/New Zealand remain negative year-over-year
Food Solutions
+7%
•
+5% constant dollar sales in N. America, EU, Asia
•
+10% constant dollar sales Australia-New Zealand
Protective Packaging
+6%
•
+8% constant dollar sales in North America (largely volume)
•
+10% constant dollar sales in Latin America (largely volume)
•
Flat to -1% constant dollar sales in Europe (sales growth in
Northern EU)
Diversey
flat to +1%
•
Approx. +10% constant dollar sales growth in developing regions
•
Japan stabilizing with flat sales
•
Approx. flat to -1% in EU and Americas
RAW MATERIAL
PRICES
sequentially
•
Resin prices declining modestly versus 3Q
•
Resin vendors continue to place price increases in the market
•
May incur slight sequential price increase in December
PRICING BENEFITS
•
Benefits of prior pricing actions
•
Anticipate positive price/cost spread in quarter for legacy Sealed Air
F/X IMPACT
(revenue)
slightly favorable
*Reflects preliminary estimated results, which are subject to change.
|
 5
SOLID FREE CASH FLOW GENERATION
469
624
645
309
358
243
2008
2009
2010
FY2011e*
Sealed Air
Diversey
•
EBITDA upside opportunity
•
Asset-light cap-ex profile
•
Efficient working capital
•
Attractive cost of funds
712
933
1,003
Pro Forma Adjusted EBITDA less Cap Ex¹
1
Diversey uses Credit Agreement EBITDA. as defined in the appendix. Please refer to
the appendix for all definitions. * Estimate reflects first nine month
results and estimated Adjusted EBITDA and Cap-ex 4Q/2011 guidance, as provided in October 2011.
5
995-1,015
($ millions) |
 BILL
HICKEY President & CEO |
 7
INTEGRATING THE BUSINESS
CURRENT PRIORITIES
•
Integrating the Business
•
Achieving Synergies
•
Reducing Debt
•
Defined
and
announced
go-to-market
organization
and
leadership
team
•
Finalizing
next
level
leadership
and
regional
organization
•
Consolidated
Finance,
HR
and
Purchasing
•
Harmonized
key
Corporate
policies
in
Accounting,
HR,
Cap-Ex
and
Purchasing
•
Food
and
Beverage
has
defined
new
value
propositions,
cross
trained
teams,
calling
on
target
accounts
and
responding
to
RFP’s
•
Institutional
&
Laundry
has
identified
sales
synergies
and
is
targeting
Food
Service
and
business
supply
distributors
where
cross
selling
and
sales
force
productivity
can
be
maximized
•
Gained
new
Food
&
Beverage
sales
largely
in
developing
regions:
Guatemala,
India,
Indonesia
and
New
Zealand
(Sales
amounts
less
than
$10M)
•
Identified
1
round
of
headcount
reductions
with
estimated
$20+M
in
savings
to
be
implemented
by year end
•
Achieved
1
joint
purchase
of
raw
materials
with
savings
of
4%
for
Diversey
(approx.
$1M
savings)
•
Delivered
1
combined
shipment
to
business
supply
distributors
•
Paid
down
$17M
in
2011
debt
maturities
and
$81M
in
2012
debt
maturities
•
Focused
on
working
capital
elements
•
Looking
at
possible
asset
sales
st
st
st |
 8
INTEGRATING THE BUSINESS (continued)
FUTURE PRIORITIES
•
Exploit technologies
•
New Products / Solutions
•
Sealed Air on-site dispensing technology
•
Advanced clean-in-place (CIP) solutions
•
Equipment value engineering
•
Integrated Food Safety Solutions
•
VSS™
(Video Systems Solutions) for food safety and health care safety
•
Automated factory hygiene processes
•
Biofilm cleaning systems |
 9
•
Solid free cash flow generation
•
Focused on reducing debt to increase shareholder returns
•
Solid core business performance and growth focused on $40+ billion
demand for food safety and hygiene solutions*
TOP REASONS TO INVEST IN SEALED AIR
9
*Freedonia World Food Safety Products Industry Study #2693, November 2010 estimates
the global food safety product demand to be approximately $9B. The
balance of the estimated market size reflects non-food hygiene demand. |
 Q&A
For additional information, please contact:
Amanda Butler, Director of Investor Relations
Email: amanda.butler@sealedair.com
Tel: 201.703.4210 |
 APPENDIX |
 12
1
Reconciliation of Net Earnings Available to Common
Stockholders to Non-U.S. GAAP EBIT, EBITDA and Adjusted
EBITDA
(Unaudited, in millions)
2008
2009
2010
Three Months Ended
December 31, 2010
First Nine
Months 2011
LTM Ended
Sept 30, 2011
U.S. GAAP net earnings available to common stockholders as reported
179.9
$
244.3
$
255.9
$
51.3
$
198.4
$
249.7
$
Add: Interest expense
128.1
154.9
161.6
39.2
110.5
149.7
Add: Income tax provision
42.4
85.6
87.5
7.9
73.8
81.7
Non-U.S. GAAP EBIT
350.4
484.8
505.0
98.4
382.7
481.1
Add: Depreciation and amortization
155.0
154.5
154.7
40.7
109.6
150.3
Non-U.S. GAAP EBITDA
505.4
639.3
659.7
139.1
492.3
631.4
Add: Share-based compensation expense
16.5
38.8
30.6
8.6
17.7
26.3
Add: Costs related to the acquisition of Diversey
0.0
0.0
0.0
0.0
30.7
30.7
Less: Gains from foreign currency forward contracts related to the closing of the
acquisition of Diversey
0.0
(6.3)
(6.3)
Add: Global manufacturing strategy and restructuring and other charges
92.5
16.7
7.4
3.7
0.0
3.7
(Less) / add: Foreign currency exchange (gains) losses related to Venezuelan
subsidiary
0.0
0.0
(5.5)
1.0
0.2
1.2
Add / (less): Other-than-temporary impairment (gains on sale) of
available-for- sale securities
34.0
4.0
(5.9)
(3.5)
0.0
(3.5)
Add: European manufacturing facility closure restructuring and other charges
0.0
0.0
6.9
6.6
0.2
6.8
Add: Settlement agreement related costs
1.5
1.8
0.6
0.0
0.8
0.8
Add: Loss on debt redemption
0.0
3.4
38.5
38.5
0.0
38.5
Non-U.S. GAAP adjusted EBITDA
649.9
$
704.0
$
732.3
$
194.0
$
535.6
$
729.6
$
Sealed Air Adjusted EBITDA
Non-U.S. GAAP EBIT, EBITDA and Adjusted EBITDA are provided as supplemental
information and do not purport to represent net earnings or net cash provided by operating
activities, as those terms are defined under U.S. GAAP, and should not be
considered as alternatives or substitutes to such measurements or as indicators of our performance
under U.S. GAAP. Our definitions of EBIT, EBITDA and Adjusted EBITDA may not
be comparable with similarly-titled measures used by others. Non-U.S. GAAP EBIT, EBITDA
and Adjusted EBITDA are among the various indicators used by our management to
measure the performance of our operations and aid in the comparison with other periods.
Such measures are also among the criteria upon which incentive compensation may be
based. Thus our management believes this information may be useful to investors. |
 13
1
Reconciliation of Diversey Net Earnings to Non-U.S. GAAP
EBITDA and Credit Agreement EBITDA
(Unaudited, in millions)
2008
2009
2010
Three Months Ended
December 31, 2010
First Nine
Months 2011
LTM Ended
Sept 30, 2011
Net income (loss)
(59.5)
$
(48.6)
$
32.7
$
(6.2)
$
45.3
$
39.1
$
Add: Income tax provision
62.6
61.9
65.9
9.7
65.4
75.1
Add: Interest expense, net
145.6
138.0
146.2
39.4
88.5
127.9
Add: Notes redemption and other costs
0.0
48.8
0.0
0.0
0.0
0.0
Add: Depreciation and amortization expenses
128.2
112.1
116.8
32.7
87.5
120.2
EBITDA
276.9
$
312.2
$
361.7
$
75.6
$
286.7
$
362.3
$
Add: Operating expenses of Holdings only
1.1
0.0
0.0
0.0
0.0
0.0
Add: Restructuring related costs
94.0
59.6
8.6
4.2
1.7
5.9
Add: Acquisition and divestiture adjustment
(22.6)
2.2
10.4
0.2
0.0
0.2
Add: Non-cash expenses and charges
1.6
12.1
21.1
(4.6)
4.6
0.0
Add: Non-recurring gains or losses
0.0
0.0
31.1
31.1
25.4
56.5
Add: Compensation adjustment
13.1
17.0
20.0
4.7
15.0
19.7
Credit Agreement EBITDA
364.2
$
403.2
$
452.9
$
111.2
$
333.4
$
444.6
$
Diversey Credit Agreement EBITDA |