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By the numbers: Q4 and full-year 2024
Q4 net sales: $1.37B
Down 0.4% year over year
Full-year net sales: $5.39B
Down 1.8% year over year
Q4 net loss: Less than $1 million
Compared with net earnings of $125M in Q4 2023
Full-year net earnings: $270 million
Compared with net earnings of $339M in 2023
- New leadership: Sealed Air’s earnings call Tuesday was led by new CEO Dustin Semach and interim CFO Roni Johnson, both longstanding fixtures at the packaging company. “I recognize that quick changes at the CEO level can raise concerns for all of our stakeholders. Let me assure you, our strategy has not changed,” Semach said. “Over the past two years, we have stabilized our business performance, rebuilt our leadership team, strengthened our balance sheet and transformed back into two market-focused business segments.” Semach said there is still “much work ahead of us.”
- Results: During the quarter, organic sales were up 5% in the food segment to $923 million, driven by volume growth across regions, Sealed Air said. But in the protective segment, organic sales were down 7% to $450 million, which was attributed to lower volumes and unfavorable pricing across regions. The company also noted weakness in the industrial and fulfillment portfolios. On the year, organic sales were up 2% in food (about two-thirds of Sealed Air’s total business) and down 8% in protective.
- Tariffs: “While most of our business is domestic production for domestic consumption, we do have trade with countries which could be impacted by the tariff discussions,” Semach said. The CEO explained that tariffs on Chinese goods are expected to have minimal impact; Sealed Air only imports a small portion of goods in its protective business into the U.S. Tariffs impacting trade with Mexico and Canada are seen as more of a cause for potential concern. The company is making shifts in its supply chain and would pass through costs to customers if needed.
- E-commerce: Sealed Air has lost share in e-commerce in recent years, Semach said. Sealed Air was impacted by Amazon’s shift to paper void fill, Semach noted during Q&A with analysts. Sealed Air sees more opportunity in mailers going forward than in fill. In addition to doubling down on fiber mailers, the company is focusing on growing its auto-bagging equipment.
- Growth areas: Sealed Air is “becoming more substrate-agnostic in the portfolios that are sold into consumer-facing end markets like e-commerce,” Semach said. The company is immediately focused on commercializing certain fiber mailer offerings. “While we have made progress on our mailer development with the second iteration of our fiber mailer ... we have been slow to fully industrialize and bring to market.” The company plans to accelerate the expansion into multiple U.S. markets. In food, “case-ready” and “sustainable” offerings are growth areas.
- Cost reduction: Throughout 2024, the company said it generated $89 million in incremental cost savings through “cost take-out” efforts. Semach said Sealed Air will close two plants by the end of this year to better consolidate its footprint.
- Outlook: Sealed Air said that the focus now on two segments — food and protective — allows for greater visibility into each business. For 2025, Sealed Air anticipates net sales will total between $5.1 billion and $5.5 billion. Free cash flow is expected to be between $350 million and $450 million. The outlook for 2025 only contemplates tariffs already in effect, the company noted.
