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SEALED AIR CORP/DE (SEE)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net sales were $1.373B, flat year over year (+0.9% constant currency), with Food up 3% and Protective down 7%; Adjusted EBITDA was $271M (19.7% margin) and Adjusted EPS was $0.75, both above internal guided midpoints per management commentary .
  • GAAP diluted EPS was $0.00 due to a one-time deferred tax asset write-off that drove a 100.5% effective tax rate; Adjusted tax rate was 28.1% (vs 18.0% LY), pressuring EPS despite lower interest expense .
  • Food delivered 5% constant-currency sales growth on 5% volume gains and 7% Adjusted EBITDA growth; Protective declined 7% constant currency with Adjusted EBITDA down 26% on lower volumes and unfavorable price realization .
  • 2025 guidance: net sales $5.1–$5.5B, Adjusted EBITDA $1.075–$1.175B, Adjusted EPS $2.90–$3.30, FCF $350–$450M; Q1 2025 guide calls for net sales ~$1.26B, Adjusted EBITDA ~$260M, and EPS $0.65–$0.70 .
  • Transformation catalysts: CEO transition to Dustin Semach, $89M 2024 cost takeout, net leverage reduced to 3.6x; management targets a Protective volume inflection in 2H 2025 while continuing Food momentum and deleveraging toward ~3x by end of 2026 .

What Went Well and What Went Wrong

  • What Went Well

    • Food segment strength: $923M sales (+5% constant currency) and $208M Adjusted EBITDA (22.5% margin), driven by case-ready and fluids share gains across regions .
    • Discipline and cash generation: operating cash flow $728M and non-GAAP FCF $508M (adjusted FCF $454M), with net leverage down to 3.6x and liquidity ~$1.37B .
    • Execution commentary: “We exceeded our expectations across Adjusted EBITDA, Adjusted EPS and Free Cash Flow… and are targeting growth and margin expansion in 2025” — CEO Dustin Semach .

  • What Went Wrong

    • Protective pressure: $450M sales (-7% constant currency), volumes -5%, Adjusted EBITDA $67M (14.8% margin) down 26% on unfavorable pricing and volume, with continued weakness in industrial and fulfillment portfolios .
    • Tax and special items: effective tax rate 100.5% from a discrete deferred tax asset write-off; Special Items $110M in Q4 vs $3M LY, driving GAAP EPS to $0.00 despite underlying profitability .
    • Price realization headwinds: company-wide unfavorable net price realization impacted margins despite productivity gains; management expects pricing pressure to persist in Protective into 2025 .

Financial Results

Quarterly progression (QoQ trend)

MetricQ2 2024Q3 2024Q4 2024
Net Sales ($USD Billions)$1.345 $1.345 $1.373
GAAP Diluted EPS ($)$0.67 $0.61 $0.00
Adjusted Diluted EPS ($)$0.83 $0.79 $0.75
Adjusted EBITDA ($USD Millions)$285.5 $276.0 $271.0
Adjusted EBITDA Margin (%)21.2% 20.5% 19.7%

Q4 2024 year-over-year vs estimates

MetricQ4 2023Q4 2024Consensus Estimate
Net Sales ($USD Billions)$1.378 $1.373 Unavailable via S&P Global (request limit)
GAAP Diluted EPS ($)$0.86 $0.00 Unavailable via S&P Global (request limit)
Adjusted Diluted EPS ($)$0.88 $0.75 Unavailable via S&P Global (request limit)
Adjusted EBITDA ($USD Millions)$274.3 $271.0 Unavailable via S&P Global (request limit)
Adjusted Tax Rate (%)18.0% 28.1% Unavailable via S&P Global (request limit)

Segment breakdown (Q4 2024)

SegmentNet Sales ($USD Millions)Constant Currency ΔVolume ΔPrice ΔAdjusted EBITDA ($USD Millions)Adjusted EBITDA Margin (%)
Food$923 +5% +5% +$2M $208 22.5%
Protective$450 -7% -5% -$6M $67 14.8%

Key KPIs (FY 2024)

KPIFY 2024
Operating Cash Flow ($USD Millions)$728
Capital Expenditures ($USD Millions)$220
Free Cash Flow ($USD Millions)$508 (reported) ; $454 adjusted for tax items
Net Debt ($USD Millions)$4,032
Net Leverage (x)3.6x
Liquidity ($USD Billions)~$1.37 (cash $372M + undrawn facilities $1.0B)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesFY 2024$5.375–$5.425B —Maintained through FY24; superseded by FY25 guide
Adjusted EBITDAFY 2024$1.09–$1.11B —Maintained through FY24; superseded by FY25 guide
Adjusted EPSFY 2024$3.00–$3.10 —Maintained through FY24; superseded by FY25 guide
Free Cash FlowFY 2024$350–$450M —Maintained through FY24; superseded by FY25 guide
Net SalesFY 2025—$5.1–$5.5B New (issued)
Adjusted EBITDAFY 2025—$1.075–$1.175B New (issued)
Adjusted EPSFY 2025—$2.90–$3.30 New (issued)
Free Cash FlowFY 2025—$350–$450M New (issued)
Net SalesQ1 2025—~$1.26B New (issued)
Adjusted EBITDAQ1 2025—~$260M New (issued)
Adjusted EPSQ1 2025—$0.65–$0.70 New (issued)
Dividend per shareQuarterly$0.20 (Oct 2024) $0.20 (Feb 2025) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Protective segment demandWeakness expected to persist into 2025; automation slowdown; fulfillment/industrial underpressure Continued softness; volumes down; price pressure First-half pressure (Amazon churn), targeting 2H volume inflection; pricing pressure persists Stabilization efforts; inflection targeted 2H 2025
Food segment momentumVolume growth, case-ready share gains Volume growth, share gains; strong EBITDA Strength in shrink bag and fluids; case-ready expansion; cautious on NA beef cycle Continued momentum amid dynamic protein cycles
Tariffs & macroNot a focus in Q2 PRNot highlighted in Q3 PRLimited expected impact; mostly domestic production; supply chain adjustments if needed Monitoring; mitigation plans in place
Automation & equipmentCustomer capex constraints; parts/services solid Not highlighted in Q3 PRRenewed focus on AUTOBAG and hybrid auto baggers; aim for net new placements to drive materials Refocus to drive pull-through of materials
Portfolio innovation (fiber mailers)Not highlighted in Q2 PRNot highlighted in Q3 PRFiber “Jiffy & Boss” mailers ramp; scaling slow but customer traction strong; multi-market rollout planned Scaling initiatives accelerating
Cost takeout & footprintCTO2Grow on track for $90M; strong cash flow; deleveraging Cost takeout stepped up; net leverage 3.7x $89M realized; ~$90M in 2025 plan; two plant closures for optimization Continued productivity and restructuring
Leadership & cultureCEO Kivits joined; Semach as President & CFO Shift to two verticals; new presidents CEO transition to Semach; interim CFO Johnson; push decision-making to field; accountability Leadership consolidation; execution focus

Management Commentary

  • “We exceeded our expectations in the fourth quarter, including coming in higher than our guided midpoint across adjusted EBITDA, adjusted EPS and free cash flow, and driving constant currency sales growth… We have now consistently delivered against expectations for 6 straight quarters.” — Dustin Semach, CEO .
  • “Food is coming off a strong 2024… We are focusing on higher growth businesses, such as case ready and fluids… Food’s growth will be further supported by new innovations in automation and sustainable offerings.” — Dustin Semach .
  • “Our current outlook is targeting a second half inflection in volumes in Protective… we are taking the right actions to stabilize the business… we will close 2 plants by the end of the year to further optimize our footprint.” — Dustin Semach .
  • “We expect net sales to be in the range of $5.1 billion to $5.5 billion… Adjusted EBITDA… $1.075 billion to $1.175 billion… Adjusted EPS… $2.90 to $3.30 per share… Q1 net sales around $1.26 billion, Adjusted EBITDA $260 million, and Adjusted EPS $0.65 to $0.70.” — Veronika “Roni” Johnson, Interim CFO .

Q&A Highlights

  • Protective trajectory and Amazon churn: First-half volumes pressured by lost Amazon paper void-fill conversions and other churn; management expects mid-to-high single-digit declines in H1 with stabilization and inflection targeted in H2 .
  • Tariff sensitivity: Business largely domestic production for domestic consumption; limited expected impact, with supply chain shifts and pass-throughs as needed; most exposure in North America cross-border trade with Mexico/Canada .
  • Food pricing: 2025 growth assumes formula pricing benefits (resins) and modest price increases reflecting portfolio value propositions; visibility from pass-throughs in North America .
  • Automation & fiber mailers: Renewed emphasis on AUTOBAG, hybrid auto baggers (substrate-agnostic), and fiber mailers; scaling has been slower than desired but traction is strong with national accounts .
  • Cost-out bridge: 2025 midpoint includes ~$90M savings (≈$65M cost takeout + ≈$25M productivity) offsetting ~$65M unfavorable net price realization and ~$25M FX headwinds; EBITDA growth ~3.5% constant currency .

Estimates Context

  • Wall Street consensus estimates via S&P Global were unavailable in-session due to a request limit; therefore, beats/misses vs consensus cannot be verified here (consensus estimates unavailable via S&P Global).
  • Management states Q4 results were above guided midpoints for Adjusted EBITDA, Adjusted EPS, and FCF; analysts may need to factor a higher Adjusted tax rate (28.1%) and sustained pricing pressure in Protective into forward estimates .

Key Takeaways for Investors

  • Food momentum is intact (volume/EBITDA strength), providing a cushion against Protective pressure; focus areas include case-ready and fluids, with automation and sustainable offerings driving pull-through .
  • Protective remains the swing factor; management targets a 2H 2025 volume inflection via go-to-market changes, fiber mailers scaling, and equipment focus (AUTOBAG) — monitor quarterly win rates and churn trends .
  • Tax-driven GAAP EPS volatility in Q4 (100.5% ETR) masks underlying profitability; Adjusted EPS of $0.75 reflects higher adjusted taxes and pricing headwinds despite lower interest expense .
  • Cash generation and deleveraging are credible: $728M CFO, adjusted FCF $454M, net leverage down to 3.6x; management targets ~3x by end of 2026, supporting medium-term capital allocation flexibility .
  • 2025 guide implies modest top-line and EBITDA growth (constant currency ~3.5% at midpoint) while absorbing FX and net price headwinds; Q1 2025 guidance sets near-term expectations amid beef-cycle pressure and Protective softness .
  • Dividend maintained at $0.20/share; watch for further clarity on the timing of Protective inflection and any incremental cost actions beyond the ~$90M embedded in 2025 .
  • Stock narrative hinges on execution in Protective, resilience in Food, and proof of operational transformation under the new CEO — catalysts include fiber mailer scaling, equipment-driven placements, and visible deleveraging progress .