All right. Good morning, everybody. My name is Matt Roberts. I'm the packaging analyst here at Raymond James. This morning we have Sealed Air, also known by its corporate brand name SEE, which is a global provider of packaging solutions including materials, equipment, and services for both food and protective end markets that include proteins, fluids, and liquids, medical and life science, e-commerce, logistics, and industrials. Now, many of you in this room are likely familiar with their branded products. You've either opened a box with Sealed Air protective packaging, packaged an item up at home using Bubble Wrap, unwrapped meat sealed in Cryovac, or perhaps you've enjoyed a glass of wine out of a Liquibox. With us today are Emile Chammas, the Interim Co-President and Co-CEO, as well as COO; Dustin Semach, Interim Co-President and Co-CEO and CFO; and Susan Yang, VP Treasurer. So maybe to start, if you all could just provide maybe a high-level overview of the company, the business segments, and why customers really choose your products versus peers? Yeah. Thanks for having us, Matt. So, as you said, SEE or Sealed Air is a $5.5 billion company. We're a global premium packaging company. And our footprint is across the globe, more than 100 plants. Our business is two-thirds in the food business and about one-third in the protective business. And ultimately, what do we do? We, we avoid, we give damage protection for all those goods that you're shipping, whether you're shipping them yourself, whether you're e-commerce, industrial. And on the food side, it's about preserving food by extending shelf life, by protecting those products. And ultimately, what we provide is a total solution. So we give the material science to protect your goods. We provide the equipment to give you operational efficiency, as well as the services that go with it. And ultimately, that's what differentiates us. It also we play across just about every end market, whether you're in electronics, you're in medical, you're in the food business, you're in the fluids business. This is our, our unique combination of those three-legged pieces of the stool that we give to our customers. Okay. Thanks, Emile. And you all recently hosted your fourth quarter earnings call. So maybe if you could revisit the volume backdrop on how either each segment or business line is performing and basically your outlook through the year. Sure, Matt. Then my name is Dustin Semach, and it's a great question. So a couple of comments I would say. One is, we looked at the fourth quarter. That came in line with our expectations, yeah, kind of reflecting end weakness and the weakness in our end markets across both our Protective and Food segments. On a positive note, we saw the seasonality pick up. So from Q3 to Q4 sequentially, we saw the holiday ramp within our food business and Protective business, which was a change from 2022 where, you know, our businesses primarily Protective came down and declined. So as we think about, you know, fiscal year 2024, we're seeing our food business up about a point in volume. That's really supported by the strength of some of our share gains, you know, how we're performing in retail end markets, as well as the benefits of our fluids and liquids businesses that Emile alluded to earlier, which participate in higher end markets largely due to the transition from rigids into flexibles. If you go to Protective, it's down about a point from a volume perspective. So think of it as Food up a point, Protective down. The total company is roughly flat from a volume perspective. And that's really reflecting if you go back to Protective overall holistically, it came down in 2022, sequentially. It bottomed out around Q4 of 2022 and has sequentially stabilized throughout 2023. And going into 2024, that's the same expectation. There are some positive indications, you know, from if you go back to the markets that we serve, whether it's electronics, industrials, fulfillment, that there is some positivity and momentum building in some of the early market indicators. But right now we're, you know, we're not reflecting that in our outlook as it currently sits today. And so we're looking at about a down a point, and that's reflecting the end market weakness as well as the continued shift from, you know, flexibles to fiber. Dustin, on the food side, how leveraged is that segment to proteins? And within proteins, how leveraged is that to the cattle cycle? And what are you seeing in terms of the cattle cycle in both the U.S. and international markets? It's a great question, Matt. So the primary area we do serve within our food business is the protein segments. And within that, you know, again, the focus is and it's not the only one because we also serve, you know, as Emile alluded to earlier, fluids and liquids, etc., but it's our primary exposure. And when you think about fresh red meat, which is the biggest portion of it, that's roughly 24% of total company relative to revenues. And about half of that is actually in beef. About half of that number is actually within the North American cattle cycle. So what he's alluding to is, you know, obviously the cycle itself is kind of going through a trough. If you look at fiscal year 2023, that was the first down year in many years. It was down about 3.5%. If you look at fiscal year 2024, the expectation of that, that cattle cycle will be down again in about 4% range. But if you really net that out, the 25 going into 12 going to, you know, kind of 6, you're looking at maybe a 30-40, you know, kind of basis points-type headwind to overall growth. And the expectation, it does take quite some time for that to come back, but it's not material in terms of overall headwind, which is partly giving us confidence that we can continue to perform in 2024. Okay. That's helpful. Thanks, Dustin. And also on the recent earnings call, you did allude to longer-term normalized growth for both food and protective. So what are those longer-term normalized growth numbers? And when do you think we'll be tracking towards that level? That's a great question. So within our food business and really in both businesses, I would say the long-term outlook is kind of low single-digit volumes once we normalize. And so really, what is that normalization? For our overall food business, that's really reflective of low single-digit protein end markets with a higher single-digit, mid-single-digit fluids businesses and the combination of those two over time getting there. And this is kind of as we move past some of the protein cycles that we're working through right now in terms of down cycles. And then when you look at protective, you know, it's really 50/50. Think of it as broadly speaking between fulfillment as well as industrials. And, you know, industrial's obviously going through a cycle, and our fulfillment business was impacted. What we believe is longer term, there's two trends that are happening, which is if you think about e-commerce holistically, it'd be mid-single-digit, high single-digit. It's being offset by some of the shifts from, you know, secondary packaging to primary packaging. Sometimes you hear the term Ship in Own Container. The second one is obviously the shift from Flexibles to Fiber, right? A lot of what we focused on during our last earnings call was talking about some of the strides we're making in that area to continue to expand our set of Fiber solutions. You know, we feel confident that we can get there in terms of participating in that end market growth, which puts us into, you know, kind of knocks off the growth rate down to low single digits. Okay. And in those protective, you did touch on some of those structural headwinds that you are facing within that segment. So is that why we shouldn't use e-commerce sales as a decent proxy for that business? It's good as a starting point, right? E-commerce and, and when you say sales, really is what it reflective of is volumes. I mean, another part of the issue that you've seen over the past couple of years is that you've seen e-commerce has continued to perform, but underlying volumes, that was largely driven by price. And you're seeing that begin to normalize out in 2024. And so it's, it's about volume returns. But if you think about volumes being mid-single-digit, then you knock that down to some of those other structural headwinds, and that gets you into the low single-digit growth that we think has sustained over time. Okay. Thanks for the clarification there. Now, Emile and Dustin, it was last October when the transition occurred with both of you now being interim co-CEOs. So, since you all that time, what's really the biggest shift or action plan that you've implemented to drive either volume growth or margin growth or both? Yeah. Thanks for that, Matt. Yeah. You just reminded us. It's been four months. It's short, but seemed like a very long time as well. So a couple of things. First one we undertook is around reorganizing the company to operate in a better way. What do I mean by that? Over the last four or five years, we've been operating under this one SEE purely regional model. Essentially, we went to market. The commercial team was one team going to market. And ultimately, this took us further away from the customers, further away from the markets. And we've reorganized that, and we've launched that new organization now a couple of weeks, organized back around logical operating units into food and protective. And not only in terms of, the frontline salespeople, but in terms of also bringing the resources. Way too many resources had moved to the global center. Move those resources back into those operating units and enabling quicker decision-making into the market. Two is we, we put around that. We restructured all the management incentive plans, the sales incentive plans back to give people in terms of that direct accountability for the business that they manage. The second piece is around our cost takeout program and accelerated that program to deliver $150 million of savings. We're well on our, our we're well underway with that. We have more than $65 million already actioned. And so what are we doing there? We're looking at the whole portfolio. So we've already announced the end of last year. We've shut down a couple of parts of the portfolio, the Kevothermal business, which is those vacuum insulated panels and the plant-based rollstock. We're looking at our footprint and rationalizing our footprint. We've already closed three sites. We have four that are in motion, and we're looking more at that. So really in terms of, holistically in terms of getting the company to operate better, but also more efficiently. Okay. That's helpful. And I wanna get back to some of that portfolio optimization as well. But you did touch on the now distinct sales teams between Food and Protective. So now that you have separate sales teams, I mean, what synergies really remain between having both of those businesses and, I mean, having, you know, different sales organizations on the ground? Do you think that'll change the pace of innovation or how you approach customer demand moving forward? Yeah. Absolutely. So it's more than just the sales teams, right? It's operating units around those segments. 'Cause remember, our customers, our solutions are very different for these two end markets. Our go-to-market is different. One is mostly through distribution. The other one is mostly direct. But it's not just the sales teams. It's about how do you empower those operating units with the whole staff of R&D representation, operations, finance, marketing, and portfolio. And also moving a decision power, which was too lopsided towards global, back into those operating units. And as we've stated publicly, you know, one of the trends in the market, taking the protective side, the shift from plastic to fiber, even though that was recognized, we were way too slow in terms of acting on it. And so part of the Sealed Air organization is how do you enable that, right? Now, in terms of what is the synergy between Food and Protective, that has nothing to do necessarily with the structure that we organize. Mostly there, what you do have is the biggest one is on the purchasing side where you can leverage the spend of the total company versus each one of the units. Obviously, SG&A efficiency. And to a smaller level, some technical, from a technology perspective, where there are some pieces which are common to both. Okay. That's helpful. Thanks for the additional color there. And you also brought up the structural cost savings program that you all embarked on. Could you tell me again, what savings you have realized to date and what buckets of savings are still forthcoming? Sure. So I'll take that one, Matt. So going back into the middle of 2023, we announced a restructuring program called Cost Takeout to Grow, targeting $140 million-$160 million of savings by 2025. What we've communicated and committed to in 2024 is executing $90 million of end-year cost savings. We're well on our way. We've delivered about $65 million to date. Emile went through a lot of the actions, so I won't repeat those, around footprint rationalization, right? So consolidating our manufacturing footprint around SG&A productivity, right, which is looking at all of our individual functions. Are they structured the right way? Are they placed in the right locations? Going back to some of the portfolio optimization, you know, some of the benefits that Emile alluded to earlier, the business lines that we've shut down, some of those are negative margin businesses as an example. So there are a lift to 2024 and 2025. And then some of the work that we're doing around the broader operating model and organizations, that we talked about, commercial, etc. So it's really all intents and purposes, we're touching every aspect of the business, making sure that not only is it cost-efficient, but it's more effective. And we're $65 million in already. We're seeing line of sight already to the $90 million a year and then achieving our 2025 number as well. So we're well underway, really confident about our progress, which is an acceleration kind of coming out of Q3. Okay. Dustin or Emile have a run to take it. So when we think about those cost savings in 2024 and into 2025, then we have volume restoration, getting back to that 1%. I mean, what is the margin potential of each segment? And what's the timeline to driving higher margins, do you think? Yeah. It's a great question. So if you really think about let's start with 2024, right? If you think about the cost takeout program, our guide for EBITDA was flat, right? And so there's two things that we're overcoming. One is price impacts this year. So if you think about a lot of that is carryover from 2023 coming into 2024, right, as, as well as the restoration of some of our compensation pools that we discussed during our Q4 earnings call. And so really, once you get past that, Matt, you know, if you go back into 2025, what we're pointing towards is acceleration and return to EBITDA growth outsized relative to revenue growth, and, which will get us back to margin expansion. Okay. Thank you. If anybody in the audience has a question, feel free to ask or raise your hand or we have we do have one. Is there, is there a microphone or, or if you wanna? I remember. Okay. Okay. I remember Sealed Air. I worked at Fritz called Dollars, who loved people to generate. We funded Dollars through venture capital. I've known the company for over 60 years. But in any event, when it was funded. But my question to you is, 'cause I never really been comfortable. Are the manufacturing facilities shipping product to someone's plant, or are they co-located at the plant of the major customer? Kind of like a beverage company. If you're in the canning business, you set up a can line to fill for the bottle of the canner. No. We don't have any. That's working out. Yeah. Today, today, we do not have any co-located plants inside our customer facilities. Okay? So you actually ship. You don't provide a packaging service. You provide packaging. No. Our services is around the equipment that we have. So if you go to our customer's plants, they'll be buying our materials. They will have our equipment and will have our, our, Service. Service people helping service those plants. Yeah. Again. Yeah. Thank you. Yeah. Could you give any color potential on the margin split between the equipment and the materials and the? So roughly in both segments, it's close to 10%. So 10% of the sales of each business is what we call on the equipment side. And that's about half of it is the equipment itself. The other half are parts and services. Package. They, they pay for the equipment, or you just install it, and then they pay? Both models. Both models. So depending on the segment, both models exist. I see. Yeah. Going back to your question about margins, materials are higher. Typically, it's in the kind of lower teens for EBITDA. But really, you don't really sell them independently. It's a combined solution. So it's not, it really is a packaging solution, not necessarily equipment and/or materials. But ultimately, in every part of our business where we have those three legs of that one stool is where we have the most differentiation, the most stickiness, and the most value we can create, right? So where we have the materials, the equipment, the services, these are, those best and stickiest business because multiple fronts. Obviously, you provide the value that your package, your materials give. The equipment provides the operational efficiency, and the service around that, that complements the whole piece in terms of, of driving all those levers, so. Any others from the crowd? Okay. Moving on. So, in regard to, to sustainability, so you've recently discussed more sustainable products in the pipeline. So maybe if you could just give us a high-level, some detail or, or around examples of, of what you currently have or, or what's in the pipeline coming up? Yeah. Absolutely. So we talked about, you know, on the protective side, we talked about the shift in certain segments from to Fiber. And this is where, you know, we said we were slow to start, but we are bringing those to market. So whether it's on the paper mailers, on our Autobag offering, which is a material with a piece of equipment so you can package your goods. We've just introduced our first Fiber version for those that require it. But even on the remaining business, accelerating our foray into the high-recycled content, whether it's 50% recycled, 100% recycled. We also just announced at the food show a couple of weeks ago the launch of the first compostable food tray into the market to displace expanded polystyrene. As we know that regulations are coming into place to move away from expanded polystyrene. And we're the first ones to launch that compostable industrial compostable retail tray. And the beauty about it is not only that it performs well. It's a complete drop-in for the customers. There's no need for them to change anything in their equipment, in their processes, or in their supply chain going in there. So, those are some in terms of sustainability, some of the ones that, you know, either we have just brought to market or bring into market this year. Okay. And you mentioned, you know, high-recycled content. How does that change the cost structure of these items versus what's currently in place? And how is the price equation different in those? Basically, I mean, how's the margin of those products compared to? Yeah. So it depends. In some cases, you know, obviously, there's a, there's a certain market for recycled resins. In some cases, it's parity. In some cases, it's cheaper than that version. But I'd say on, on the whole, it's, it's basically the same, right? Yeah. Where you're just taking one of your existing products and introducing that more sustainable solution, typically, the market doesn't pay for it, right? It's just something that they want and do it. Except where you bring something unique like the compostable tray, where, you know, this product does not exist on the market. Obviously, that carries a different premium versus, you know, you're just making your product more sustainable. Mm-hmm. And now, along with that, as you do roll out new products, and innovation is a focus, should we expect any associated increase in CapEx or spending related to that, or is it still well within your longer-term target? Yeah. So right now, in terms of our capital allocation, you know, we're about a 4% Capex, 4% of sales. And, you know, again, we believe within that operating model, there's enough space there in terms of where we allocate that, whether it's more towards introducing some of those new products or supporting the existing business. So we don't see material change. Okay. Speaking of uses of cash, you've recently laid out a target of getting to below 3.5 times levered by the end of 2025, I believe. So should we expect your free cash flow generation primarily to be used for debt paydown, or have you given any consideration to buybacks where shares are currently trading? Yeah. I'll take that, Matt. You're right. Our short-term capital allocation focus will be on the debt paydown. So prior to last year, our capital allocation has been split between M&A and the share buyback. But given where our balance sheet is right now, essentially the main focus after getting all the free cash flow will be geared toward the debt paydown. So in 2023, from the peak of Q2, we've paid down about $280 million gross debt. And then thinking about each year from a free cash flow generation, we usually have $350-$400 million free cash flow. We have $120 million of a dividends payout. Then the rest will be basically all go toward the debt paydown. And that will pretty much give us about a 0.2x turn each year. So end of last year, Q4, our leverage ratio was 3.9. And each with two years that gets us to 3.5x. Very good. Thank you, Susan. Thank you. Now, you've also discussed some recent product line exits and have discussed the ongoing portfolio review. So, what parts of the business remaining are considered non-core, if there are any other remaining? And when you make those decisions, I mean, what factors take precedence? Is it margin profile, generating cash for deleveraging, or shifting more towards automation? I mean, what are some of the factors at play when you make those decisions? That's great. It's a great question. So just as a reminder, some of the portfolio optimization work that we've done so far, that we've spoken about today and one new piece of information, which is, you know, we exited our Kevothermal business, which is our temperature assurance panels that you ship as an example of COVID vaccines, that did very well during COVID, has come down, and we exited that business in the middle of last year. If you think about our Q3 announcement in Q3 around plant-based rollstock, right, and then most recently in our earnings call, was an exit of a piece of our business in Argentina. So going back to your point about, are we looking at other areas of the business? Absolutely. We've talked in the past about some areas of Protective, that may be more commoditized, that we don't see as being aligned to our longer-term objectives. Those objectives, in terms of where we have competitive differentiation, I'll go back to Emile's points around where we have service, automation, right, as well as strong material science and differentiation, is the combination of those three things that really come together, that drive the competitive moat and differentiation in our product set relative to our competition. And so we are continuing to evaluate. You know, we have identified in our portfolio where we think things fit longer-term for us and where they don't. But right now, at this point in time, we're really focused on, you know, the transformation that we've undertaken and, you know, executing better, delivering better, maximizing the opportunity set in all of our businesses. We'll evaluate those continued decisions longer term. And so to your point, Matt, about what are the things that we're thinking about, it's really across all those dimensions. And then it's a tight question of timing. Okay. And of those three lines that you did discuss, can you give any color on how much revenue or EBITDA was shed on that or basically the volume headwinds that you're seeing from that in 2024? Sure. It's about half a point so far with what we announced. Those three items I just previously discussed is about half a point in each segment, right, in terms of impact from a volume perspective. EBITDA, in both cases, there were largely negative margin businesses. So it's actually an uplift from an EBITDA perspective. Great. Thank you. And with that, do we have any more questions from the gallery? All right. Well, with that, thank you all for joining. Thank you for participating. And we do have a breakout following this, downstairs in quarter of four. Okay. Great. All right. Thank you.