Sealed Air Corporation

Good day and thank you for standing by. Welcome to the Sealed Air Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participant lines are in listen-only mode. After the presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star then 1 on your telephone keypad. Please be advised today's conference may be recorded. If you require operator assistance during the call, please press star then 0. I'd now like to hand the conference over to Lori Chapman, Vice President of Investor Relations.

Thank you, and good morning, everyone. With me today are Ted Duhini, our CEO, and Chris Stevens, our CFO. Before we begin our call, I'd like to note that we have provided a slide presentation to help guide our discussion. In addition to our results and outlook, Ted will go through a deep dive on C, automation. Please visit our website where today's webcast and presentation can be downloaded from our IR website at sealthere.com. Statements made during this call stating management's outlook or predictions for future periods are forward-looking statements. These statements are based solely on information that is now available to us. We encourage you to review the information in the section entitled Forward-Looking Statements in our earnings release and slide presentation, which applies to this call. Additionally, our future performance may differ due to a number of factors. Many of these factors are listed in our most recent annual report on Form 10-K and as revised and updated on our quarterly reports on Form 10-Q and current reports on Form 8-K which you can also find on our website or on the SEC's website. We discuss financial measures that do not conform to US GAAP. You will find important information on our use of these measures and their reconciliation to US GAAP in our earnings release. Included in the appendix of our today's presentation, you will find US GAAP financial results that correspond to the non-US GAAP measures re-referenced throughout the presentation. I will now turn the call over to Ted. Operator, please turn to slide three. Ted?

Thank you, Lori, and thank all of you for joining our fourth quarter and year-end earnings call. Chris and I will discuss our Q4 and year-end results, our 2022 outlook, and we'll be introducing a deep dive into our C automation three-year plan. On slide three, you can see our visions. to become a world-class digitally driven company automating sustainable packaging solutions. And we'll show you how we're getting it done. Now let's turn to slide four. In 2021, we delivered strong sales and earnings, overcoming dramatic inflationary supply and COVID challenges. Our results are a testament to our culture, people, and powerful sea operating engine. We're building a world-class, digitally-empowered company, acting like a startup to disrupt the markets we serve, our industry, and ourselves. These are exciting times for us. We're taking bold steps, investing in our people, operations, and customers to create significant value for our stakeholders. You can see how our C operating engine performed in the fourth quarter. Net sales were up 14% to $1.5 billion, and adjusted EBITDA was up 18% to $330 million. For the full year, we generated free cash flow of $497 million. As part of our strategic portfolio realignment, we successfully completed the divestiture of reflectors, a maker of insulated materials for the construction market, and generated additional after-tax proceeds of $65 million. On slide five, we're raising our C operating model growth goals for sales and adjusted EBITDA by 200 basis points. Our higher above-market growth goals are led by our confidence in our strategy, disruptive innovations and investments, and our execution across markets and geographies. Through M&A and C Ventures, we're looking to expand into attractive markets, technologies, and disruptive business models to accelerate our speed to market. Under Cventures, we recently completed the acquisition of Foxpac, a pioneer in digital printing. Let's turn to slide six, where you can see our transition from a materials-driven business to a market and customer-centric company focusing on automation, digital, and sustainability, powering our growth. While Chris will give you more detail on our geographic performance, I'll focus on activities in our top markets. In proteins and fluids, we experienced strong growth in automation with equipment, parts, and services up double digits in the fourth quarter and the year. In 2021, our e-commerce fulfillment portfolio shifted towards automation and sustainable solutions. Sales for Auto Bag, which is illustrated on this slide, and Auto Box were up double digits in the quarter and the year, reflecting the increased demands for automated solutions from e-commerce and logistics. You can see an example of our Auto Wrap solution on this slide as well. With Continental Tires and our partnership with UPS, we're enabling a fully automated tire packaging and sorting solution that creates an enhanced customer experience. This is creating significant savings for Continental Tires and new business for UPS. Turning to slide seven, we'll take you through a deep dive on C automation. Our plan is to more than double our automation business to over $1 billion by 2025. Our solutions model starts by identifying savings for our customers and converting those savings into solutions with a faster than three-year payback. Our solutions multiplier, as materials and service flow through the installed base, is key to our growth. We are digitally connecting more than 100,000 installed assets. Our C automation solutions resonate with our customers as we address their needs to reduce labor dependency, build more resilient operations, increase productivity, reduce costs, and deliver flawless quality. C automation solutions drive margin expansion for C as compelling customer savings and operational improvements allow for the best solutions at the right price, and we are making them sustainable. We're investing to double our equipment production and service capacity over the next three years to match our ambitions. We recognize we have to go faster, and we are relentless in this pursuit. The chart to the left shows how customer savings are behind our growth in automation. The chart to the right illustrates our bookings trends of our fastest growing automation platforms, giving you transparency into the strength of our business. Solving customer challenges and driving tangible savings are the central pillars of our sustainable competitive advantage, creating an inimitable ecosystem. On slide 8, we are showcasing our C automation solutions. This is an example of a $7 million automated protein system with less than a three-year payback, providing a step-change improvement for our customers' operations. We start with the most labor-intensive processes in meat packing facilities. C-AutoLoad automates the process of loading the meat in the bag. We're integrating cobots, robots, and other automated systems to increase line speed while producing flawless quality with AutoVac and AutoPak. We continue to innovate in high-performance cryovac materials, making them more sustainable, recyclable, and effective. Our state-of-the-art vision systems for quality control can see what humans cannot, and our artificial intelligence and machine learning continuously makes the process smarter. We use our CMARC to validate and certify quality. Our advancements in digital printing will enable customers to improve their operations and, at the same time, digitally connect with their consumers. A key point of differentiation for C is how we leverage our internal touchless automation capabilities and our OpEx teams to improve customer operations. Our industry-leading experts are working with customers and their facilities to simplify the process, eliminate waste, remove people from harm's way, and then automate, putting in practice the principle of you get what you measure. Let's talk about what automation means for growth. On slide nine, we use the waves of the C mark to illustrate the value of the solutions multiplier. We are changing from our past of being a materials first to leading with an automation first solutions model. We start with the value of the initial equipment order equaling 1x. We continue with parts and services being 2x over the equipment lifecycle. And the automation and integration opportunities represent three acts. As our high performance materials, such as paper and films, along with digital graphics flow through the system, it takes us well over 10 times the value of the original equipment order. Let me now turn to slide 10. Our strategies to make sustainability an integral part of our business. We continue to make significant progress on our 2025 sustainability pledge with approximately 50% of our solutions already designed for recyclability, and we reached approximately 20% recycled and or renewable content in those solutions. Approximately 15% of our solutions are fiber-based. We design our high-performance materials with recyclability in mind to make sustainability more affordable and to create a pathway for circularity. It starts with our touchless operations, where we actively measure every touch point from pellet to bag and aggressively work to simplify the process, eliminate waste, and millions of touches. We're investing in automation and robotics to make it happen. We're linking our own automation to our customers' operations and leveraging the same productivity processes we use internally. Our digital initiative is critical to our sustainability and automation efforts. Next quarter, we plan to feature in detail how our proprietary digital printing technology and C-Mark connect consumers and customers to build brands and close the loop on the circular economy. I'll now pass the call to Chris to review our results in more detail.