Sealed Air Q1 Report 2023

Highlights

First quarter net sales in Food were $853 million, an increase of 6% as reported. Currency fluctuations had an unfavorable impact of $24 million, or 3%. On a constant dollar basis, net sales increased $70 million, or 9%. The Liquibox acquisition had a favorable impact of $57 million, or 7%, and price realization had a favorable impact of $33 million, or 4%. Volumes decreased by $21 million, or 3%, driven by food retail market declines and the adverse impact from prior supply disruptions. Adjusted EBITDA of $195 million, or 22.8% of net sales, decreased 3% from $200 million, or 24.8% of net sales.

Completes Liquibox Acquisition

• On February 1, 2023, SEE completed the acquisition of Liquibox, a pioneer, innovator, and manufacturer of Bagin-Box sustainable fluids & liquids packaging and dispensing solutions for fresh food, beverage, consumer goods, and industrial end-markets. Consideration paid was approximately $1.15 billion, net of cash acquired, subject to customary adjustments.

First Quarter 2023 U.S. GAAP Summary

• Net sales of $1.3 billion decreased 5% as reported, with APAC decreasing 8%, the Americas decreasing 6%, and EMEA decreasing 1%.
• Net earnings were $63 million, or $0.44 per diluted share, as compared to net earnings of $150 million, or $1.00 per diluted share. The current year’s results were unfavorably impacted by costs of $30 million related to the Liquibox acquisition, including transaction and integration expenses and purchase accounting impacts related to the amortization of intangible assets and inventory step-up expense.
• Income tax expense was $34 million, resulting in an effective tax rate of 35.0% in the first quarter of 2023. This compares to an income tax expense of $59 million in the prior year, or an effective tax rate of 28.4%. The effective tax rate increase in the first quarter of 2023 as compared to the prior year is primarily driven by the impact of accruals for uncertain tax positions on lower pre-tax earnings.

First Quarter 2023 Non-U.S. GAAP Summary

• Net sales decreased $32 million, or 2%, on a constant dollar basis. Volumes decreased by $132 million, or 9%, while the Liquibox acquisition had a favorable impact of $57 million, or 4%, and price realization had a favorable impact of $43 million, or 3%. By region, in constant dollars, EMEA increased 4% while the Americas and APAC decreased 4% and 1%, respectively.
• Adjusted EBITDA was $267 million, or 19.8% of net sales, as compared to $327 million, or 23.1%. The
• decrease in Adjusted EBITDA was primarily due to lower volumes, partially offset by the Liquibox acquisition.
• Adjusted earnings per diluted share decreased to $0.74, from $1.12, primarily due to lower Adjusted EBITDA. Currency fluctuations had an unfavorable impact of $0.01 per share, or 1%, in the first quarter of 2023.