Attached files
| file | filename |
|---|---|
| 8-K - 8-K - SEALED AIR CORP/DE | d620217d8k.htm |
| EX-99.1 - EX-99.1 - SEALED AIR CORP/DE | d620217dex991.htm |
 Third Quarter 2013
Earnings Conference Call Supplement
(Unaudited Results)
Jerome A. Peribere –
President & CEO
Carol P. Lowe –
Senior Vice President & CFO
Exhibit 99.2 |
| Safe Harbor and Regulation G Statement
2
This presentation contains “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by
such words as “anticipates,” “believes,” “plan,” “assumes,”
“could,” “estimates,” “expects,” “intends,” “may,”
“plans to,” “will” and similar expressions. These statements reflect our
beliefs and expectations as to future events and trends affecting our business, our consolidated
financial position and our results of operations. Examples of these forward-looking
statements include expectations regarding our anticipated effective income tax rate, the
potential cash tax benefits associated with the W.R. Grace settlement, potential volume,
revenue and operating growth for future periods, expectations and assumptions associated with our
restructuring programs, availability and pricing of raw materials, success of our growth
initiatives, economic conditions, and the success of pricing actions. A variety of
factors may cause actual results to differ materially from these expectations, including
general domestic and international economic and political conditions; changes in our raw material and energy
costs; credit ratings; the success of restructuring plans; currency translation and devaluation
effects, including Venezuela; the competitive environment; the effects of animal and
food-related health issues; environmental matters; and regulatory actions and legal
matters. 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 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. While we may elect to
update these forward-looking statements at some point in the future, we specifically
disclaim any obligation to do so, whether as a result of new information, future events, or otherwise.
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 and information provided in our earnings
release. |
 Jerome A. Peribere
President & CEO |
 Key
Takeaways THIRD QUARTER 2013
4
Q3 Performance Summary
•
Sales $1.9B
–
Up 2.0% as reported
–
Up 2.9% constant currency
–
Volume increased 1.4%
–
Price/mix favorable 1.5%
•
Adj. EBITDA: $282M, 14.5% of sales
•
Adj. EPS $0.39; Reported EPS of $0.18
Excluding SARs expense:
•
Q3 2013 Adj. EBITDA: $290.7M, 15.0% of sales
•
Q3 2012 Adj. EBITDA: $277.5M, 14.6% of sales
•
Q3 2013 Adj. EPS: $0.43
•
Q3 2012 Adj. EPS: $0.29
•
Delivered year over year constant currency
sales growth in all regions except for
Europe
•
Developing regions constant currency sales
increased 9%, accounting for 26% of total
net sales
•
Favorable product price/mix across all
divisions and all regions, except Europe
•
EBITDA margin expansion due to higher
volumes and cost savings initiatives
•
Core Tax Rate of 23.3%
Reported U.S. GAAP Measures
Q3-13 Net Sales: $1.9B; Operating Profit: $140M; Net Income: $38M
Q3-12 Net Sales: $1.9B; Operating Loss*: ($1.2B); Net Loss: ($1.2B)
Q3-13 Effective tax rate: 24.6%
*Includes impairment of goodwill and certain intangible assets associated with the
Diversey acquisition Please see Sealed Air’s October 30, 2013 earnings press release for
important information about the use of non-U.S. GAAP financial measures, including
applicable reconciliations to U.S. GAAP financial measures. |
 5
*
Constant
currency
refers
to
unit
volume
and
price/mix
performance
and
excludes
the
impact
of
currency
translation
Regional Sales Performance
THIRD QUARTER 2013
Please see Sealed Air’s October 30, 2013 earnings press release for important
information about the use of non-U.S. Latin
America
Reported: 1.3%
Constant Currency: 8.6%
% of Sales: 10.6%
North
America
Reported: 1.9%
Constant Currency: 2.2%
% of Sales: 39.6%
Japan/ANZ
Reported: (9.3%)
Constant Currency: 0.9%
% of Sales: 6.7%
Europe
Reported: 3.5%
Constant Currency: (0.4%)
% of Sales: 31.8%
AMAT
Reported: 6.9%
Constant Currency: 10.2%
% of Sales: 11.3%
GAAP financial measures, including applicable reconciliations to U.S. GAAP financial measures. |
 Food
Care 6
ACHIEVED SALES & ADJ. EBITDA GROWTH
Reported U.S. GAAP Measures:
Q3-13 Food Care Operating Profit: $115M
Q3-12* Food Care Operating Profit: ($228M)
*Includes impairment of goodwill and certain intangible assets associated with the
Diversey acquisition
•
Q3
Net
Sales:
1.7%;
constant
currency:
3.2%
Volume growth 1.5%; Price/mix favorable 1.7%
Packaging constant currency sales increased 2.9%
Hygiene constant currency sales increased 3.8%
•
Q3
Adj.
EBITDA
Margin:
15.8%
Adjusted EBITDA increased 7.4%
Excluding impact of SARs, increased 8.5%
Key drivers: cost synergies, manufacturing
efficiencies & higher volumes
•
Q3
Volume
Trends
by
region
vs.
PY
North America: 1.0%
AMAT: 9.9%
Europe: 1.0%
JANZ: (1.9%)
Latin America: 2.2%
•
Largest
growth
drivers:
Strength
in
AMAT
&
Latin America; modest growth in NA; customer
acceptance of new products & solutions
•
Challenges:
European macro economy; Beef
volume declines in North America and Europe
Net Sales ($M)
Adjusted EBITDA ($M)
Please see Sealed Air’s
October 30, 2013 earnings press release for important information about the use of
non-U.S. GAAP financial measures, including applicable reconciliations
to U.S. GAAP financial measures. The sum of the amounts may not equal the total amounts due to rounding.
Packaging
Hygiene
Q3 2013
Q3 2012
764
774
171
176
936
951
Volume
Cost
Synergies
SARs
0
-2
-2
151
4
10
140
Q3
2012
Mix
&
Price/Cost
Spread
SG&A/
Other
Q3
2013 |
 Diversey Care
7
DEVELOPING REGIONS GROWTH OFFSET
EUROPE & NA DECLINES
•
Q3 Net Sales:
–
Volume essentially flat; Price/mix favorable 1.8%
–
Double digit constant currency sales growth in
Eastern Europe, Latin America & AMAT
–
Low single digit constant currency sales declines
in NA and Europe
•
Q3 Adj. EBITDA Margin:
Adjusted EBITDA decreased 13%
–
Excluding impact of SARs, decreased 5.5%
–
Key drivers: Higher SG&A expenses, partially
offset by cost synergies
•
Q3 Volume Trends by region vs. PY
–
North America: (5.4%)
AMAT: 7.4%
–
Europe: (1.4%)
ANZ: (2.5%)
–
Latin America: 6.1%
•
Largest
Growth
Drivers:
Strong
performance
in developing regions, better pricing disciplines
•
Challenges:
Exposure
to
European
macro
economy; Distribution channel destocking &
weaker floor care sales in NA
Reported U.S. GAAP Measures:
Q3-13 Diversey Care Operating Profit: $18M
Q2-12* Diversey Care Operating Profit: ($976M)
*Includes impairment of goodwill and certain intangible assets associated with the
Diversey acquisition
SARs
-4
-15
Volume
-1
Cost
Synergies
Net Sales ($M)
Adjusted EBITDA ($M)
527
535
Q3 2012
Q3 2013
50
8
58
3
*
SG&A/Other: Includes salary inflation of $4M, bad debt allowance for large customer in AMAT
of $3.8M and increased inventory obsolescence of $2.5M Q3
2012
Q3
2013
Mix &
Price/Cost
Spread
SG&A/
Other*
Please see Sealed Air’s October 30, 2013 earnings press release for important information about
the use of non-U.S. GAAP financial measures, including applicable reconciliations to
U.S. GAAP financial measures. The sum of the amounts may not equal the total amounts due to rounding.
1.4%; constant currency: 1.6%
9.4% |
 Product Care
8
HIGHER VOLUME & COST SYNERGIES OFFSET
RAW MATERIAL INCREASE
Reported U.S. GAAP Measures:
Q3-13 & Q2-12 Product Care Operating Profit: $53M
Net Sales ($M)
•
Q3 Net Sales:
3.6%; constant currency: 4.0%
Volume increased 3.4%; Price/mix favorable 0.6%
Constant currency sales increased 3.6% in NA &
2.7% in Europe
•
Q3
Adjusted
EBITDA
Margin:
16.2%
Adjusted EBITDA increased 1.4%
Key drivers: Higher volumes and cost synergies
offsetting raw material increases
•
Q3 Volume Trends by region v. PY
North America: 2.5%
AMAT: 7.8%
Europe: 4%
JANZ: 11.1%
Latin America: (5%)
•
Largest
growth
drivers:
E-commerce,
retail,
packaging systems
•
Challenges:
Global
economic
weakness,
increases in raw material costs
-3
-4
Adjusted EBITDA ($M)
Please see Sealed Air’s
October 30, 2013 earnings press release for important information about the use of
non-U.S. GAAP financial measures, including applicable reconciliations
to U.S. GAAP financial measures. The sum of the amounts may not equal the total amounts due to rounding.
3
65
65
5
389
403
Q3 2012
Q3 2013
Q3
2012
Cost
Synergies
Volume
Mix &
Price/Cost
Spread
SG&A/
Other
Q3
2013 |
 Carol P. Lowe
Senior Vice President & CFO |
 Q3
2013 Net Sales Bridge ($ in millions)
1,939
1,900
+2%
+28
Foreign
Exchange
Price/Mix
-15
Q3 2012
Net Sales
+26
Q3 2013
Net Sales
Volume
10
Please see Sealed Air’s October 30, 2013 earnings press release for important information about
the use of non-U.S GAAP financial measures, including applicable reconciliations to U.S.
GAAP financial measures.
|
 11
Q3 2013 Adj. EBITDA Bridge
($ in millions)
+2.7%
0
-6
-16
-1
Please see Sealed Air’s
October 30, 2013 earnings press release for important information about the use of
non-U.S. GAAP financial measures, including applicable reconciliations
to U.S. GAAP financial measures. The sum of the amounts may not equal the total amounts due to rounding.
282
9
22
275
Q3 2012
Adj.
EBITDA
Cost
Synergies
Volume
Mix & Price/
Cost Spread
SG&A/
Other
SARs
Foreign
Exchange
Q3 2013
Adj.
EBITDA |
 SIGNIFICANT YoY IMPROVEMENT
YTD Free Cash Flow
12
($ in millions)
($ in millions)
Nine Months Ended
September 30,
Free Cash Flow
2012
2013
U.S. GAAP Cash Flow from
Operating Activities
$ 65
$ 275
Capital Expenditures
(98)
(80)
Free Cash Flow
$ (33)
$ 195
2012
Year-Over-Year Improvement
•
Higher net earnings
•
Net Improvement in working capital metrics
•
Lower Capital Expenditures
2013
Nine Months Ended September 30
($33)
$195
Please see Sealed Air’s October 30, 2013 earnings press release for important information about
the use of non-U.S. GAAP financial measures, including applicable reconciliations to
U.S. GAAP financial measures. |
 Adjusted EBITDA: Approx. $1.055B
(D&A: $310M; Interest Expense: $355M; Non-cash profit sharing: $40M)
Net Sales: Approx. $7.7B or 1% YoY Growth
(Includes Approx. 1% unfavorable FX)
2013 Outlook
Adjusted EPS: $1.25 –
$1.30
(Anticipated core tax rate of approx. 20% to 23% in FY2013)
Free Cash Flow: Approx. $375M
(Assumes: $140M cash restructuring; $130M capex; $290M cash interest expense
) Note: Adjusted EBITDA, EPS and D&A guidance excludes the impact of
special items. 13
Please see Sealed Air’s October 30, 2013 earnings press release for important information about
the use of non-U.S. GAAP financial measures, including applicable reconciliations to U.S.
GAAP financial measures. |
 Jerome A. Peribere
President & CEO |
 Q&A
Earnings Conference Call
Third Quarter 2013 |
 Appendix |
 3Q
2013 Adjusted EPS Calculation
17
Reported U.S. GAAP Measures :
Q3 2013 Operating Income: $140M; Net Income $38M
(1)
Comprised of $38.6M of property and equipment depreciation, $29.5M of amortization
of Intangibles and $5.4M of share-based compensation, net of $0.1
million special items (2)
2013 contributions to be made in Sealed Air common stock
Adjusted EBITDA
$ 282.0
Depreciation and amortization
(1)
(73.4)
Interest expense
(88.9)
Non-cash profit sharing expense
(2)
(9.7)
Adjusted pre-tax earnings
$ 110.0
Core taxes (23.3%)
(25.6)
Adjusted net earnings
$ 84.4
Diluted Shares
213.7
Adjusted EPS
$ 0.39
Please see Sealed Air’s October 30, 2013 earnings press release for important
information about the use of non-U.S. GAAP
financial
measures,
including
applicable
reconciliations
to
U.S.
GAAP
financial
measures.
($ in millions, except Adjusted EPS and share count) |
 Liquidity & Net Debt
18
($ in millions)
Liquidity Position
1,677
Net Debt
Lower net debt as a result of cash generated
from operating activities, partially offset by
dividend payments
777
700
200
Sept 2013
Cash & Cash Equivalents
Revolving Credit Facility
A/R Securitization
4,779
4,727
Dec 2012
Sept 2013
Please see Sealed Air’s October 30, 2013 earnings press release for important information about
the use of non-U.S. GAAP financial measures, including applicable reconciliations to
U.S. GAAP financial measures.
|