SEE Reports Q1 2022 Results

SEE announced financial results for Q1 2022.

“Our SEE Operating Engine delivered strong Q1 performance as we accelerate our transformation to a world-class, digitally driven company automating sustainable packaging solutions.

We are proud of our people and their determination to overcome extreme inflationary pressures and widespread supply challenges while delivering exceptional results,” said Ted Doheny, SEE’s President and CEO.

“We recently launched our new Digital Packaging Solutions brand prismiq™ to create game-changing value for our customers powered by our breakthrough digital printing technology,” continued Doheny.

Unless otherwise stated, all results compare first quarter 2022 to first quarter 2021 results from continuing operations. Year-over-year financial discussions present operating results from continuing operations as reported. Year-over-year comparisons are also made on an organic basis and constant dollar basis, which are non-U.S. GAAP measures. Organic refers to changes in unit volume and price performance and excludes acquisitions in the first year after closing, divestiture activity and the impact of currency translation. Constant dollar refers to changes in net sales and earnings, excluding the impact of currency translation. Additionally, non-U.S. GAAP adjusted financial measures, such as Adjusted Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), Adjusted Net Earnings, Adjusted Diluted Earnings Per Share (“Adjusted EPS”) and Adjusted Tax Rate, exclude the impact of specified items (“Special Items”), such as restructuring charges, restructuring associated costs, adjustments in the valuation of our “SEE Ventures” portfolio (which may include debt, equity method, or equity investments), gains and losses related to acquisition and divestiture of businesses, special tax items (“Tax Special Items”) and certain infrequent or one-time items. Please refer to the supplemental information included with this press release for a reconciliation of U.S. GAAP to Non-U.S. GAAP financial measures.

Business Segment Highlights

First quarter net sales in Food were $808 million, an increase of 15% as reported. Currency had an unfavorable impact of $23 million, or 3%. On a constant dollar basis, net sales increased $129 million, or 18%, with favorable price of approximately 17%, with increases realized across all regions. Volume growth was 1.5%, mainly driven by food service recovery. Adjusted EBITDA of $200 million, or 24.8% of net sales, increased 28% from $157 million, or 22.3% of net sales, in the prior year. The increase in Adjusted EBITDA was primarily attributable to favorable price/cost spread and productivity improvements, partially offset by labor and non-material inflation.

First quarter net sales in Protective were $610 million, an increase of 8% as reported. The divestiture of Reflectix, Inc. and currency fluctuation each had an unfavorable impact of approximately $12 million, or 2%. On an organic basis, net sales increased $69 million, or 12%, with favorable price of 15% partially offset by lower volumes of 3% that resulted from normalizing demand trends in the industrial and fulfillment markets. Adjusted EBITDA increased 16% to $127 million, or 20.9% of net sales, as compared to $110 million, or 19.5% of net sales, in the prior year. The increase in Adjusted EBITDA was primarily attributable to favorable price/cost spread, partially offset by labor and non-material inflation.

First Quarter 2022 U.S. GAAP Summary

Net sales of $1.4 billion increased 12% as reported, with the Americas increasing 18%, EMEA increasing 4%, and APAC decreasing 1%.

Net earnings were $150 million, or $1.00 per diluted share, as compared to net earnings of $106 million, or $0.68 per diluted share, in the prior year.

Income tax expense was $59 million, resulting in an effective tax rate of 28.4%, in first quarter 2022. The current year rate was favorably impacted by share price accretion in equity compensation. This compares to tax expense of $55 million in the prior year, or an effective tax rate of 34.0%, which was unfavorably impacted by changes to foreign statutes.

First Quarter 2022 Non-U.S. GAAP Summary

Net sales increased $185 million, or 15%, on a constant dollar basis. Currency had an unfavorable impact of $35 million, or 3%. Price had a favorable impact of $204 million, or 16%, while volumes decreased by $7 million, or 1%. Constant dollar net sales were higher across all regions, with the Americas increasing 18.5%, EMEA increasing 11% and APAC increasing 4%.

Adjusted EBITDA was $327 million, or 23.1% of net sales in first quarter 2022, as compared to $268 million, or 21.2%, in the prior year. Currency fluctuations had an unfavorable impact of $7 million, or 3%, in first quarter 2022. The increase in Adjusted EBITDA margin was largely due to favorable price/cost spread and productivity improvements, partially offset by labor and non-material inflation.

The Adjusted Tax Rate was 25.2% in first quarter 2022, as compared to 27.6% in the prior year, which was unfavorably impacted by changes to foreign statutes.

Adjusted earnings per diluted share increased to $1.12 in first quarter 2022, from $0.78 in the prior year, primarily due to Adjusted EBITDA growth.