Fourth Quarter and Full Year 2024 Highlights

•       Dustin Semach promoted to Chief Executive Officer
•       Completed the full reorganization into two market-focused businesses, Food and Protective
•       Food volume growth driven by competitive share gains and continued end-market demand
•       Protective portfolio rebalance and enhanced customer focus continues
•       Cost take-out generated $89 million of incremental cost savings for full-year 2024
•       Net leverage ratio reduced to 3.6x with maintained focus on deleveraging the balance sheet
•       Providing our financial outlook for 2025

CHARLOTTE, N.C., February 25, 2025 – Sealed Air Corporation (NYSE: SEE) today reported financial results for the fourth quarter and full year 2024 and provided its 2025 outlook.

“During the fourth quarter, we completed the reorganization into two market-focused businesses, Food and Protective, and had a strong finish to the year,” said Dustin Semach, Sealed Air’s President and CEO. “We exceeded our expectations across Adjusted EBITDA, Adjusted EPS and Free Cash Flow, reflecting improved discipline in fundamentals. I want to express my deep gratitude to our 16,400 plus Sealed Air team members for their commitment to our transformation and their tireless efforts in solving our customers' most critical packaging challenges."

“With the foundation now firmly in place, we are focused on maximizing the potential of each business based on their respective end-markets and portfolios. We are accelerating the momentum in Food by expanding further into higher growth end-markets with our case ready and fluids solutions and continuing to stabilize Protective. In parallel, we are continuing to streamline our operations and drive further productivity across the company. As a result, we are targeting growth and margin expansion in 2025. We are focused on accelerating the pace of execution to improve the outcomes for our customers and maximize value for our shareholders,” said Semach.

Financial Highlights

Fourth Quarter 2024

Net sales of $1.37 billion was flat as reported in fourth quarter 2024 compared to fourth quarter 2023, with the Food segment increasing 3% and the Protective segment decreasing 7%. Net sales increased $13 million, or 1%, on a constant dollar basis. Volumes increased by $17 million, or 1%. Price had an unfavorable impact of $4 million, or less than 1%.

Income tax expense was $85 million, resulting in an effective tax rate of 100.5% in the quarter. This compares to an income tax expense of $(9) million in the prior year, or an effective tax rate of (7.8)%. The current year effective tax rate was unfavorably impacted primarily by the discrete, one-time write-off of a deferred tax asset associated with a legal entity restructuring, whereas the prior year effective tax rate was favorably impacted by the resolution of certain previous years' tax matters. The Adjusted Tax Rate was 28.1% in the quarter, as compared to 18.0% in the prior year. The fourth quarter 2023 Adjusted Tax Rate benefited from the reversal of previously accrued liabilities related to uncertain tax positions.

Net loss was less than $1 million, or less than ($0.01) per diluted share, in fourth quarter 2024 as compared to net earnings of $125 million, or $0.86 per diluted share, in fourth quarter 2023. The current quarter results were unfavorably impacted by $110 million of Special Items expense compared to $3 million of Special Items expense in the same quarter of the prior year. The increase in Special Items expense in the current quarter were primarily driven by unfavorable impacts related to income tax items, higher restructuring and other associated costs related to the cost take-out to grow program ("CTO2Grow Program") and an impairment charge associated with a debt investment.

Adjusted earnings per diluted share decreased to $0.75, from $0.88 in the prior year, primarily due to higher adjusted tax expense, partially offset by lower interest expense.

Adjusted EBITDA was $271 million, or 19.7% of net sales, as compared to $274 million, or 19.9% in the prior year. The decrease in Adjusted EBITDA was primarily due to unfavorable net price realization and lower volume in Protective, partially offset by higher Food volumes.

Full Year 2024

Net sales of $5.39 billion decreased 2% as reported for full year 2024 compared to full year 2023, with the Food segment increasing 2% and the Protective segment decreasing 8%. Net sales decreased $61 million, or 1%, on a constant dollar basis. Volumes increased by $35 million, or less than 1%. Price had an unfavorable impact of $119 million, or 2%.

Income tax expense was $189 million, resulting in an effective tax rate of 41.2% for the current year. This compares to an income tax expense of $90 million in the prior year, or an effective tax rate of 21.0%. The current year effective tax rate was unfavorably impacted by the discrete, one-time write-off of a deferred tax asset associated with a legal entity restructuring, whereas the prior year effective tax rate was favorably impacted by the resolution of certain previous years' tax matters. The Adjusted Tax Rate was 25.9% for full year 2024, as compared to 23.6% in the prior year. The 2023 Adjusted Tax Rate benefited from the reversal of previously accrued liabilities related to uncertain tax positions.

Full year 2024 net earnings were $270 million, or $1.84 per diluted share, as compared to net earnings of $339 million, or $2.34 per diluted share, in full year 2023. The current year results were unfavorably impacted by $189 million of Special Items expense compared to $122 million of Special Items expense in the prior year. The increase in Special Items expense were primarily driven by unfavorable impacts related to income tax items, higher restructuring costs related to the CTO2Grow Program and an impairment charge associated with a debt investment, partially offset by lower Liquibox acquisition related costs.

Adjusted earnings per diluted share decreased to $3.14, from $3.18 in the prior year, primarily due to higher adjusted tax expense and higher shares outstanding, partially offset by lower interest expense.

Adjusted EBITDA was $1,111 million, or 20.6% of net sales, as compared to $1,107 million, or 20.2% in the prior year. The increase in Adjusted EBITDA was primarily due to lower operating costs driven by productivity benefits as a result of the CTO2Grow Program, partially offset by unfavorable net price realization in Protective.

Business Segment Highlights

Fourth quarter net sales in Food were $923 million, an increase of 3% as reported compared to fourth quarter 2023. Currency had an unfavorable impact of $15 million, or 2%. On a constant dollar basis, net sales increased $45 million, or 5%. Volumes increased by $44 million, or 5%, with growth in all regions driven by competitive share gains and continued end-market demand. Price had a favorable impact of $2 million. Adjusted EBITDA of $208 million, or 22.5% of net sales, increased 7% from $195 million, or 21.8% of net sales, in the prior year. The increase in Adjusted EBITDA was primarily attributable to higher volumes.

Fourth quarter net sales in Protective were $450 million, a decrease of 7% as reported compared to fourth quarter 2023. Net sales were unfavorably impacted by currency fluctuation of $2 million, or less than 1%. On a constant dollar basis, net sales decreased $32 million, or 7%. Volumes decreased by $26 million, or 5%, resulting from continued weakness in our industrial and fulfillment portfolios. Price had an unfavorable impact of $6 million, or 1%. Adjusted EBITDA of $67 million, or 14.8% of net sales, decreased 26% from approximately $90 million, or 18.7% of net sales, in the prior year. The decrease in Adjusted EBITDA was primarily attributable to lower volumes and unfavorable net price realization.

Cash Flow and Net Debt

Cash flow provided by operating activities during full year 2024 was $728 million, as compared to $516 million during 2023. Capital expenditures were $220 million during full year 2024, as compared to $244 million during 2023. Free cash flow, defined as net cash provided by operating activities less capital expenditures, was a source of $508 million during full year 2024, as compared to a source of $272 million during the prior year. Excluding $195 million of deposits and payments during 2023 related to the resolution of previous years’ tax matters and a $54 million refund received during fourth quarter 2024 related to the same matters, Free Cash Flow was a source of $454 million during full year 2024 compared to a source of $467 million in the prior year.

Dividend payments for both the full year 2024 and 2023 were $118 million.

Net Debt, defined as total debt less cash and cash equivalents, decreased to $4.0 billion as of December 31, 2024 from $4.3 billion as of December 31, 2023. As of December 31, 2024, Sealed Air had approximately $1.37 billion of available liquidity, comprised of $372 million in cash and $1.0 billion of available and unused lines of credit under our committed credit facilities. The net leverage ratio, defined as net debt divided by trailing twelve month Adjusted EBITDA, was 3.6x as of December 31, 2024, as compared to 3.9x as of December 31, 2023.

Outlook for Full Year 2025

(in $ millions except EPS)      Range               Constant dollar △%

Net Sales                                 $5,100 to $5,500            (3%) to 4%
Adjusted EBITDA                    $1,075 to $1,175             (1%) to 8%
Adjusted EPS                             $2.90 to $3.30               (4%) to 9%
Free Cash Flow                          $350 to $450 

Adjusted EBITDA, Adjusted EPS and Free Cash Flow are non-GAAP financial measures. We have not provided guidance for the most directly comparable GAAP financial measures, as they are not available without unreasonable effort due to the high variability, complexity and low visibility of certain Special Items.

Conference Call Information

Sealed Air Corporation will host a conference call and webcast on Tuesday, February 25, 2025 at 10:00 a.m. (ET) to discuss our Fourth Quarter and Full Year 2024 Results. The conference call will be webcast live on the Investors homepage at www.sealedair.com/investors. A replay of the webcast will also be available thereafter. A slide presentation, which includes supplemental information relating to the Company’s fourth quarter earnings will be made available through the “Presentations & Events” section of the Company’s Investor Relations website at https://ir.sealedair.com/events-and-presentations prior to the call.

About Sealed Air

Sealed Air Corporation (NYSE: SEE), is a leading global provider of packaging solutions that integrate sustainable, high-performance materials, automation, equipment and services. Sealed Air designs, manufactures and delivers packaging solutions that preserve food, protect goods and automate packaging processes. We deliver our packaging solutions to an array of end markets including fresh proteins, foods, fluids and liquids, medical and life science, e-commerce retail, logistics and omnichannel fulfillment operations, and industrials. Our globally recognized solution brands include CRYOVAC^® brand food packaging, LIQUIBOX^® brand liquids systems, SEALED AIR^® brand protective packaging, AUTOBAG^® brand automated packaging systems, and BUBBLE WRAP^® brand packaging. In 2024, Sealed Air generated $5.4 billion in sales and has approximately 16,400 employees who serve customers in 117 countries/territories.

www.sealedair.com

Website Information

We routinely post important information for investors on our website, www.sealedair.com, in the Investors section. We use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investors section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.

Non-GAAP Information

In this press release, we include certain non-GAAP financial measures, including Net Debt, Adjusted Net Earnings and Adjusted EPS, net sales on an "organic" and a “constant dollar” basis, Free Cash Flow, Adjusted EBITDA, Adjusted EBITDA Margin, net leverage ratio and Adjusted Tax Rate. Management uses non-GAAP financial measures to assess operating and financial performance, set budgets, provide guidance and compare with peers’ performance. We believe such non-GAAP financial measures are useful to investors. Non-GAAP financial measures should not be considered in isolation from or as a substitute for GAAP information. See the attached supplementary information for reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures. Information reconciling forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures is not presented because it is not available without unreasonable effort. The reconciling information that is not available includes forward-looking ranges of certain Special Items with high variability, complexity and low visibility. We are unable to address the probable significance of such unavailable information, which could have a potential significant impact on our future GAAP financial results.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by such words as “anticipate,” “believe,” “plan,” “assume,” “could,” “should,” “estimate,” “expect,” “intend,” “potential,” “seek,” “predict,” “may,” “will” or the negative of these terms and similar expressions. All statements contained in this press release, other than statements of historical facts, such as those regarding our growth initiatives, business strategies, operating plans, business outlook, restructuring activities and market conditions, are forward-looking statements. These statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties that may cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. These risks include important factors discussed in the “Risk Factors” section in Part I of our most recent Annual Report on Form 10-K, as updated by our other filings with the Securities and Exchange Commission.

Any forward-looking statements made by us in this press release are based solely on management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements, we disclaim any obligation to do so even if subsequent events cause our views to change, except as may be required by applicable law.