Sealed Air Corporation

Good day and thank you for standing by. Welcome to the Q3 2025 Sealed Air Earnings Conference Call. At this time all participants are in a listen only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star 1 and 1 on your telephone and you will then hear an automated message advising your hand is raised and to withdraw your question please press star 1 and 1 again. we would kindly ask for just one question per participant. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Mark Stone. Please go ahead.

Thank you, and good morning, everyone. This is Mark Stone, CLDR's Vice President, Investor Relations. With me today are Dustin Simak, our President and CEO, and Kristen Actis-Grande, whom I'm pleased to welcome as our new Chief Financial Officer. Before we begin our call, I would like to note that we have provided a slide presentation to supplement today's discussion. This presentation, along with a third quarter earnings release, is available to download from our Federal Relations page on our website at sealedair.com. I would like to remind everyone that during today's call, we make forward-looking statements, including our outlook or estimates for future periods. These statements are based solely on information that is currently available to us. Please review the information in the forward-looking statement section of our earnings release and slide presentation. These sections also apply to this call. Our future performance may differ due to a number of factors. Many of these factors are listed in our most recent filings with the SEC. Additionally, we will discuss financial measures that do not conform to U.S. GAAP. Information on these measures and their reconciliation to U.S. GAAP can be found in our earnings release or the appendix of our slide presentation. I will now turn the call over to Dustin and Kristen. Operator, please turn to slide three.

Thank you, Mark, and good morning, everyone. Thank you for joining SILDAIR's third quarter 2025 earnings call. Let me begin by welcoming Kristen Actis-Grande to SILDAIR. Kristen joined in late August and brings a proven track record of driving transformation, optimizing complex manufacturing and distribution networks, and instilling operational rigor. She's already hit the ground running, and I'm looking forward to partnering with her and the rest of the team to further accelerate our ongoing transformation. In a few minutes, Kristen will give color on our third quarter results and set expectations for how we anticipate closing the year. But first, I will provide an update on the progress both businesses are making to navigate the macro environment. The macroeconomic trends from the second quarter continue throughout the third quarter. These trends include softer global growth outlooks, muted industrial production, and a consumer that, while still resilient, has decreasing purchasing power, particularly in North America within the lower- to middle-income households. These factors, combined with lower consumer sentiment, persistent inflation, and ticking up unemployment numbers, are contributing to increasing uncertainty around the consumer, particularly in the U.S. Considering that backdrop, our team executed well in order, continuing to focus on controlling the controllables by putting our customers first, executing with discipline, driving productivity, and reducing costs across the business. In this market environment, we are focused on leveraging our core competitive strengths to find new sources of growth across both businesses. We are accelerating productivity initiatives to offset potential further market weakness while our transformation continues to take hold across the business. I will share more on those opportunities for each business, starting with protective. Our protective turnaround remains on track. Our performance in the third quarter continues to demonstrate improving fundamentals, despite market indicators, whether it's overall box shipments or industrial output, pointing to a subdued demand environment and a cautious consumer. Sales sequentially improved with material volumes inflecting the growth for the first time since 2021. While we remain cautious on the consumer and the macro environment, we are expecting materials to continue to stabilize in the fourth quarter, offset by a weaker outlook for equipment driven by timing and continued market pressures. The North American business has stabilized further and is performing relatively in line with the market. In the early stages of the transformation, we focused on minimizing churn and rebuilding our overall go-to-market strategy. We increased the number of sellers and improved customer and distribution partner engagement. In parallel, we also focused on resetting our large account strategy and value proposition, which we knew would take time as this customer segment has a longer sell time. Our approach is beginning to yield results, with the team recently landing multiple seven-figure competitive wins and national accounts. As the transformation in North America is taking hold, we are beginning to increase our efforts in EMEA and APAC. While those businesses were less impacted by volume pressure than North Americans, The same value unlock exists to upgrade talent, create more efficient go-to-market strategies, enhance distributor relationships, and invest in our field teams to accelerate growth. More to come as we progress on this. As we mentioned during our last call, with the go-to-market transformation well underway, we are shifting to other areas of the business to ensure they are fit for purpose, meaning streamlined and driving better business outcomes. As part of this, we have focused on improving the effectiveness of our R&D up ensuring the organization is connected to our customers while taking a more balanced approach between internal and external solution development. While still early in this aspect of the transformation, this approach is already producing better solutions with stronger product market fit, increasing our speed to market, and helping to accelerate the build-out of our substrate agnostic portfolio. Recent proof points include the newly launched AutoVac brand A50 HP hybrid bagging machine, which processes poly and curbside recyclable paper bags with high-speed precision and print-on-bag capability. Our fully fiber JP embossed padded mailer and our upcoming ProPad Mini, a new innovative tabletop paper system. We are excited about our pipeline, and I will keep you updated. Finally, I would like to highlight one other area of focus as part of our fit-for-purpose strategy, network optimization, where we are evaluating our footprint for opportunities to improve our cost positions and better serve our customers. Historically, we incrementally rationalized the footprint, but our current planning efforts are taking a holistic approach, working backwards from our end markets, analyzing each of our products, and then driving improved unit economics through a combination of facility, asset, and logistics optimization. The transformations of this scale, progress is generally expected to be nonlinear. With that said, I am pleased to see the improvements we are making week after week, demonstrating incremental progress towards our goals.