Packaging Gateway

Daily Newsletter

09 August 2023

Daily Newsletter

Sealed Air records fall in earnings and revenues in Q2 2023

Weak currency performance was offset by gains from the acquisition of Liquibox.

US-based packaging company Sealed Air (SEE) has reported net earnings of $99.1m for the second quarter (Q2) of 2023, a decrease of 13% from nearly $114m in the same period a year ago.

Diluted earnings per share (EPS) was 68 cents in Q2 2023, versus 77 cents last year.

This was driven by weak performance in the Americas and the Europe, Middle East and Africa markets, which outweighed growth in the Asia-Pacific region.

The company's net sales was $1.38bn for the quarter ending 30 June 2023, down 3% from $1.42bn in Q2 2022.

Price had a favourable impact of 2% on Q2 2023 performance, with currency having an unfavourable impact of 1.7%. This was offset by gains from the acquisition of Liquibox.

Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) dipped 4.4% to $280.3m from $293.4m in 2022.

Net debt was $4.7bn as of 30 June 2023, an increase from $3.2bn at the end of 2022.

SEE president and CEO Ted Doheny said: “Our second-quarter earnings results were in line with our expectations driven by continued weakness in our end-markets.

“We expect demand weakness to continue with second-half volumes similar to first half of 2023. We are revising our full-year 2023 guidance accordingly.”

Looking ahead to the rest of 2023, SEE has trimmed its net sales forecast, now anticipating between $5.40bn and $5.60bn, compared with its prior projection of $5.85-6.10bn.

The company's updated full-year adjusted EBITDA outlook is between $1.07bn and $1.12bn, versus its earlier forecast of $1.25bn to $1.30bn.

SEE also predicts full-year adjusted EPS of $2.75-$2.95, as against the previous forecast of $3.50-$3.80.

Generative AI remains an untapped potential across the consumer industry

GlobalData estimates the total AI market will be worth $909 billion in 2030, growing at a CAGR of 35.2% between 2022 and 2030. The consumer goods, foodservice, and packaging sectors are undergoing digital transformation, accelerated by the COVID-19 pandemic and changing consumer preferences. AI can help companies operating in these sectors by significantly reducing costs and production times. In Nestlé's 2022 full-year results, the company announced a renewed focus on digitalization to drive growth. Financial and reputational pressures associated with supply chain disruptions and sustainability concerns are also driving interest in the digitalization of supply chains. Data science and ML are strong investments across all areas. However, the sectors cannot stop at AI-powered data analytics applications. They must also explore computer vision (CV), smart robots, AI sensors that automate manufacturing and distribution logistics, and generative AI tools that increase efficiency across corporate departments and customer service operations and enable innovation in product design. For the most part, the consumer goods, foodservice, and packaging sectors will not play a significant role in creating and developing AI hardware or platforms. Instead, these sectors will help scale up the adoption of AI technologies, such as CV, conversational platforms, and smart robots. This adoption will be driven by the financial benefits and potential cost savings AI automation delivers across global supply chains.