Good day, and thank you for joining us. Welcome to the Q3 2023 Sealed Air Earnings Conference Call. Currently, all participants are in listen-only mode. Following the presentation, we will have a question-and-answer session. Please note that today’s conference is being recorded. I would now like to turn it over to our first speaker, Brian Sullivan from Investor Relations. Please continue.

Thank you, and good morning, everyone. With me today are Emile Chammas, Interim Co-CEO and COO; as well as Dustin Semach, Interim Co-CEO and CFO. Before we begin, I would like to note that we have provided a slide presentation to supplement the call. Please visit sealedair.com where today's webcast and presentation can be downloaded from our Investor Relations page. Statements made during this call stating management's outlook or estimates for future periods are forward-looking statements. These statements are based solely on information that is now available to us. We encourage you to review the information in the section entitled Forward-Looking Statements in our earnings release and slide presentation, which applies to this call. Additionally, our future performance may differ due to a number of factors. Many of these factors are listed in our most recent annual report on Form 10-K and as revised and updated on our quarterly reports on Form 10-Q and current reports on Form 8-K, which you can also find on our website or on the SEC's website. We discuss financial measures that do not conform to U.S. GAAP. You will find important information on our use of these measures and the reconciliations to U.S. GAAP in our earnings release. Included in the appendix of today's presentation, you will find U.S. GAAP financial results that correspond to the non-U.S. GAAP measures we reference throughout the presentation. I will now turn the call over to Emile and Dustin. Operator, please turn to Slide 3. Emile?

Thank you, Brian, and thank you for joining our call. Today, I will discuss SEE's leadership transition, provide an update on the markets we serve, trends we are seeing and how we operate in this dynamic environment. Dustin will take you through our third quarter results, provide updates on our 2023 outcomes and talk about our progress and plans around capital allocation. After that, we will open the call for your questions. Moving to Slide 3. As previously announced, Dustin and I are Interim Co-CEOs in addition to our operational roles. Before we move to the market and business update, I would like to talk through how our Co-CEO operating model will work. First, we expect this model to accelerate the turnaround of our results and improve overall execution. Together, we will evolve SEE strategy, connect that strategy to the overall business and deliver results. I am focused on driving our innovation, supply chain and commercial teams, specifically bringing these teams closer to improve our market intelligence, time to innovate, cost to deliver and commercial execution. Dustin will be more focused on driving our Cost Take-Out to Grow program, optimizing our portfolio and strengthening our balance sheet. While automation, digital and sustainability continue to be key enablers of long-term growth, we are shifting our focus to address the current market dynamics. As a result, we are reevaluating our solutions portfolio and go-to-market strategies with an intense focus on meeting our customers' evolving packaging needs in our core protective markets. Now turning to the market and business update. Our end markets remain challenged and visibility limited. We are facing multiple headwinds, including soft retail demand and consumer trade downs in the food markets, compounded by a global capital cycle that is net down due to the U.S. Europe remains firmly in recession, and the recovery across Asia has been slower than we initially expected earlier in the year. On the Protective side, industrial output remains flat to down. Economic uncertainty is increasing, driving customers to put inventory below historical levels and reduced capital spending. Destocking is moderating in North America but continues with EMEA and APAC. Pricing pressures have increased as consumers and customers react to inflation. Despite these headwinds, since the beginning of the year, our Protective packaging business delivered largely flat sequential performance. Our CRYOVAC, Fluids and Liquids, and Automation businesses have performed very well. In this economic environment where our existing customers are challenged to grow and are focused on acquiring new customers and taking share in the marketplace, we are actioning this by firstly investing in and redeploying resources towards lead generation, marketing and new sales roles that are closer to the markets our customers operate in. Secondly, improving the competitive positioning of certain solutions within both Food and Protective by rationalizing the cost to serve across our portfolio. Thirdly, financing our innovation efforts between long-term, higher risk reward and shorter-term projects that address our customers' more immediate needs. Lastly, continuing to lead with Automation, which provides our customers with a single point of contact for both materials and equipment. These solutions solve their most critical packaging challenges and drive longer-term sustainable efficiencies within their operations. On Cost Take-Out to Grow, we have actioned approximately $40 million in annualized run rate savings, approximately 25% of our $140 million to $160 million program. As of September year-to-date, we have exited over 600 positions related to both reductions in volume with our network and workforce optimization. On portfolio optimization, we completed the previously announced closure of the Kevothermal temperature assurance business in quarter 3. Separately, we decided to exit our plant-based roll-stock business. This was a sustainable offering within our consumer-ready vertical that was displaced by more competitive solutions in the market. Moving forward, we will continue to bring new sustainable solutions while maintaining an enhanced emphasis on market competitiveness. While we are in good progress on Cost Take-Out to Grow and portfolio optimization, we need to accelerate to get ahead of future market impacts. Before I turn it over to Dustin, I wanted to say that I'm excited to collaborate with him. While he has only been here for a short period, he has quickly come up to speed on the business, pushed us to challenge every aspect of how we operate and become a trusted business partner. Together, we are looking through the entire company for opportunities to grow in a cost-effective way, drive further efficiencies and ensure we are world-class in everything that we do. This is an ongoing process, and we will keep you updated as key decisions are made. Now I'd like to turn it over to Dustin to review our financial results. Dustin?

Thank you, Emile, and good morning, everyone. I would like to start by saying it's a privilege to co-lead SEE with Emile. Emile has been with SEE for 13 years and has done a tremendous job transforming our supply chain. He's a proven leader who is well respected within the industry and across all of SEE. I can't wait to see his impact across our commercial and innovation efforts, and I'm really excited about all that we can accomplish together. Now moving to third quarter results. Let's turn to Slide 4. In the quarter, net sales were $1.38 billion, flat on a constant currency basis, and adjusted EBITDA was $285 million, down 6%, excluding currency compared to last year. Volumes have improved sequentially, excluding M&A and FX, since the beginning of the year. Sequentially, adjusted EBITDA improved about 2% from $280 million in the second quarter, mainly driven by improved volumes and better net operating costs. Adjusted earnings per share in the quarter were $0.77, down 27% compared to a year ago on a constant currency basis, primarily driven by lower adjusted EBITDA and higher interest expense. Turning to Slide 5. Liquibox contributed 6% to total company sales or approximately $82 million, but was offset by organic declines driven by continued market pressures and customer destocking in Protective as well as continued weakness in food retail end markets. Third quarter adjusted EBITDA of $285 million, which included a $17 million contribution from Liquibox, decreased $8 million or 3% compared to last year with margins of 20.6%, down 30 basis points. This performance was mainly driven by lower volumes within Protective. As it relates to adjusted earnings per diluted share in the third quarter of $0.77, our adjusted tax rate was 25.7% compared to 25.6% in the same period last year. We did not repurchase any shares in the third quarter. Our weighted average diluted shares outstanding in the third quarter of 2023 was 144.9 million. Moving to Slide 6. In the third quarter, Food net sales of $893 million were flat on an organic basis with price favorability offsetting organic volume decline. Volume decreased year-over-year by approximately 1%, driven by continued weakness in retail demand, partially offset by growth in our Food automation solutions. Food adjusted EBITDA of $194 million in the third quarter was up 7% in constant dollars compared to last year, with margins at 21.7%, down 60 basis points. The increase in adjusted EBITDA was mainly due to contributions from Liquibox, partially offset by lower volume and unfavorable net price realization of $5 million. Protective third quarter net sales of $488 million were down 15% organically, driven by volume declines in all regions with continued market pressures in industrial, fulfillment markets and continued customer destocking activities within our APS business. Protective adjusted EBITDA of $95 million was down 15% in constant dollars in the third quarter, with the margins at 19.5%, up 30 basis points. The decrease in adjusted EBITDA was driven by lower volume, partially offset by favorable net price realization of $2 million in cost control activities. Protective adjusted EBITDA margin improved 30 basis points compared to the second quarter, primarily driven by favorable cost control. On Slide 7, we review our third quarter net sales by segment and by region. In our Protective segment, net sales were flat with 10% growth in Food, while Protective was down 15%. By region, we grew EMEA by 1%, offset by a decline of 1% in the Americas with Asia Pacific flat. Now let's turn to free cash flow and leverage on Slide 8. Through the third quarter, excluding the impact of the IRS to positive $175 million, free cash flow was a source of cash of $183 million compared to a $137 million source of cash in the same period a year ago, representing an increase of 33% year-over-year. The primary driver of this improvement was significant inventory reduction, partially offset by lower earnings and higher interest costs. Since the peak of Q2, we have reduced total debt by approximately $100 million, exiting Q3 with a net leverage ratio of approximately 4.1x. Our total liquidity position of $1.2 billion, including $281 million in cash and the remaining amount in our committed undrawn revolver. For capital allocation, we remain laser-focused on debt reduction, targeting to drive below 3.5x net debt to adjusted EBITDA over the next two years. We also plan to refinance our December 2024 notes over the coming months. Let's turn to Slide 9 to review our 2023 outlook. Our full year 2023 guidance, which we reaffirmed last week, remains unchanged. Q3 top line performance was right in line with our expectations, and adjusted EBITDA has exceeded original expectations due to better pricing and cost control activities. However, going into Q4, we have greater-than-expected FX headwinds and now target sales to be slightly below the midpoint of our full year range, driven by approximately $30 million impact from FX, with volume projections still in line with original estimates. We continue to expect adjusted EBITDA and free cash flow to be in line with the midpoint in respective guidance ranges. Adjusted EPS will be at the higher end of the range, driven by lower depreciation and amortization expense, reflecting improved discipline around capital deployment. Reaffirming our current guidance ranges, despite exceeding expectations in Q3, reflects the limited visibility environment we continue to operate in. The outcome of our fourth quarter will depend on the strength of our seasonal tailwinds related to the holiday cycle in both Food and Protective. We continue to expect an L-shape recovery through 2023 and into 2024, reflecting an increasingly uncertain macroeconomic environment driven by lingering destocking, weakening consumer demand and a higher for longer rate environment. At this point in time, for fiscal year 2024, we are targeting flattish revenue growth, low single-digit volume growth offset by negative pricing. We expect the acceleration of our cost reduction and operational excellence initiatives to continue to position us to deliver adjusted EBITDA growth next year. While a transition in leadership can raise questions about disruption, let me be clear. Emile and I have the full Board support to take any necessary action to navigate the current market and maximize value for our shareholders, and that's exactly what we intend to do. Lastly, I'd like to close by thanking the 17,000 plus SEE team for their commitment to each other and for solving our customers' most critical packaging challenges day in and day out. With that, Emile and I look forward to your questions.

And our first question comes from George Staphos from Bank of America Securities.

Hi, everyone. Good morning. Thanks for the details, and Emile and Dustin congratulations and best of luck with the transition. The question that I had, you talked about putting more resources closer to the market and changing both Europe, it sounds like your commercial and, if you will, transformation strategies. Can you talk a bit more to what that means in specific examples on what you hope to gain from that? And relatedly, in terms of being closer to the market, what are you directly doing now to be out in the sites and out with your customers more frequently? Any changes to the way you're scheduling the way you're visiting with your employees? As you mentioned, it's a transition, you want to keep everybody focused. Thank you.

Thank you, George. Thank you for your question. So again, in the prepared remarks, we talked about two items. So the way we are going to get closer to the markets and operate faster is essentially on two fronts. One is, we are investing into better revenue operations capabilities into the company, but also we are moving more resources from working on longer-term projects at a global level, closer to the markets and the customers. Similarly, we are doing the same around our technical resources by balancing the efforts around those longer-term higher risk reward projects and the shorter-term projects to address the customers' more immediate needs in this tough environment.

And a couple of follow-up points, George, to that. And just in general, when we talk about our resources and you think about the shift in leadership that we've had now, it's about making sure that you think of it as resource allocation, where we are placing our efforts, particularly as we reinvest some of the cost efficiency we drive from Cost Take-Out to Grow as part of that broader program. It's about getting more feet on the street as an example, investing more in marketing, but at the regional level, investing more in some of our revenue operations capabilities. The second piece to your question around meeting with specifically customers and plants, Emile and I are going to start, obviously, in two weeks with our first beginning set of plant visits as an example, and we've already been meeting with customers. So I think on both fronts, while we are dividing and addressing short-term needs, we are making sure that we are out in the field more than we have been historically.

Thank you. Please stand by for our next question. Our next question comes from Adam Samuelson from Goldman Sachs.

Yes, thank you. Good morning, everyone. Maybe keying off of that discussion a little bit more, Emile, in the prepared remarks, there was a discussion or a mention of reevaluating some of the automation and solutions offering. And I guess, I think longer term and as a growth driver for the company, automation solutions, digital have been kind of key drivers of Sealed Air market outgrowth over time. Is that still the intention, but maybe less kind of big whale hunting and more for big projects and trying to just drive shorter term business wins while we continue to pursue those longer term opportunities? Maybe help bridge how we think about reallocating resources from longer-term growth opportunities to near and feet on the street?

Yes. So just to be clear, automation, digital, and sustainability, we are not abandoning those. These are key enablers of our strategy in terms of our execution and winning in the marketplace. We continue to drive and lead with automation, which provides our customers with a single point of contact for the entire solution. We are continuing to drive into more automation capabilities in parts of our portfolio which are lacking. So with that said, the effort continues and there are key enablers. But while we are working on some of those more longer-term capabilities, we need to execute and win in the marketplace. And that's what we mean by shifting and allocating resources.

Thank you. Please stand by for our next question. Our next question comes from Ghansham Panjabi from Baird.

Hey, guys. Good morning. Going back to George's question, I mean, the interim designation suggests a very short period of time, right? Some of the things you're talking about are sort of longer-term improvements and so on and so forth. So at this time, as you see it over the timeline of the interim designation, is there cost outs that are going to take priority versus anything else on the commercial side? I'm just trying to think about prioritization.

It's a great question. It's important to note that while this is an interim designation, Emile and I are already collaborating on the Cost Take-Out to Grow initiative, which includes both cost reduction efforts and our ongoing commercial activities. This ensures continuity in the program with the two leaders currently overseeing it. We are balancing these responsibilities, which is a key aspect of the Co-CEO model. Emile is now dedicating even more time to the commercial teams, while I remain focused on the Cost Take-Out to Grow initiative. Our goal is to maintain this balance. Central to this effort is our emphasis on execution and enhancing our day-to-day operations as we seek to improve our overall results.

Thank you. Please stand by for our next question. Our next question comes from Matt Roberts from Raymond James.

Good morning, everyone. I appreciate the opportunity to speak. I would like to explore the near-term versus long-term decisions you're making. Are there specific end markets or product launches you are addressing? When examining particular end markets, it appears that automation has declined, which aligns with your previous comments. Should we anticipate this slowdown to persist? Additionally, eCommerce seems to be decreasing as a portion of your overall mix. Is this primarily due to market share losses, or is it related to issues in the end market? I am looking to understand how these decisions are being prioritized. Thank you.

Thank you for that question. So in terms of automation, it trending down is mostly driven by the current economic environment. With the interest rates and the uncertainty, there is hesitation by many customers in terms of the timing of driving the CapEx. That's what's driving that piece. It's not driven by reduction in focus. In fact, we have very strong automation solutions in many parts of our portfolio. In other parts, we don't have automation solutions, and we are actively driving to create those capabilities through partnerships and other initiatives. So stay tuned on that as we go forward. It's really about the allocation of resources and balancing how many resources we have, whether it's within our innovation teams, our commercial teams that are focused on very long-term projects versus those that are focused on driving winning solutions today and winning today in the marketplace.

Thank you. Please stand by for our next question. Our next question comes from Jeff Zekauskas from JPMorgan.

Thank you very much. I have a two-part question. First, regarding Liquibox and its growth initiatives since the acquisition, how would you evaluate them? Are the growth initiatives as strong as you anticipated, stronger, or weaker? Second, on Slide 16, you indicate that your Protective prices are 2% lower after previously being positive. Can you explain what factors are contributing to that?

Let me start by addressing the first question, and then Dustin will respond to the second one. To begin with, I'll discuss what is driving Fluids, including Liquibox. The CRYOVAC fluid side has been performing well, particularly in automation and our FlexPrep solution, which is now available in over 25,000 stores globally. This solution originated in the U.S. and has since expanded. This segment of our portfolio continues to contribute to our growth. Regarding Liquibox, as mentioned last quarter, we encountered several operational challenges, which we have now resolved. We have expedited the integration process and allocated more resources from the wider company to tackle these issues. Additionally, we have broadened our portfolio to target a wider range of markets, something that was previously limited. We have moved past those challenges and are seeing accelerated growth heading into Q3 and next year.

Jeff, following up on your second point from Slide 16, I want to discuss the commentary regarding the changing pricing environment. In relation to resin prices, Protective's position is significantly influenced by the spot market. In the first half of the year, prices decreased to around mid-year, then remained stable. However, as we approach the fourth quarter, we are seeing a slight increase. This change is indicative of the heightened competition and the overall trend impacting our situation. In our commentary, we mentioned 2024, and that's influencing our current thoughts on the potential impacts we may experience next year.

Thank you. Please stand by for our next question. Our next question comes from Josh Spector from UBS.

Thank you for taking my question. Regarding the guidance for this year, you confirmed the midpoint of EBITDA. If we calculate for Q4, it shows a decline of about $100 million from Q3, which could indicate unusual seasonality. I'm curious about the factors that lead to that projection. Are customer conversations reflecting this perspective at this time? Thank you.

Josh, thank you for the question. As I mentioned earlier, our fourth quarter currently reflects the limited visibility we are experiencing. Additionally, the GDP impact in Europe is affecting our bottom line, which is not related to operational issues. We previously discussed that the differences in our fourth quarter outlook stem from our seasonal business cycles. These cycles, particularly in eCommerce for our Protective business and the holiday-related Food cycle, are critical. Their strength will significantly influence our results. So far in October, we are on track, but there is still more to consider. This illustrates the variability in potential outcomes.

Thank you. Please stand by for our next question. Our next question comes from Anthony Pettinari from Citi.

Good morning. You've talked about rationalizing costs to serve across the portfolio and exiting some product lines like that roll-stock business. Just wondering, with the new management approach, are there components of the business that might be larger and might have a more logical owner and maybe could help accelerate deleveraging? Or would those kinds of dispositions or asset sales or larger portfolio moves, would those be kind of outside the mandate given the interim designation? Or how should we think about that?

Great question. This is Dustin speaking. As we mentioned earlier and in Q2, we have initiated our effort in portfolio optimization. We have already announced Kevothermal and now we are discussing the plant-based roll-stock business we announced today. This effort is continuing and is now accelerating. The goal is to take any necessary actions to create value, whether large or small. We are examining the entire portfolio to determine what is best suited for our purpose moving forward. Deleveraging is our primary focus, and we aim to get below 3.5x within the next two years or less, and we definitely have the opportunity to deleverage. Several factors are influencing this perspective, and we believe we are nearing the bottom of an overall cycle. All of these elements are considered in our thinking. To reiterate, this is meant to speed up those actions, not slow them down, regardless of their size.

Thank you. Please stand by for our next question. Our next question comes from Lawrence De Maria from William Blair.

Thanks. Good morning. Two quick things here. So you amended the bylaws, I guess, maybe more difficult to nominate Directors. So the question really is whether that's preemptive or to any potential activists? And then secondly, and related to that, you've looked at the Protective portfolio, assuming you're thinking about doing some pairing. So curious if you're still looking at that? And any updates on how much of that portfolio might be considered pairing and where we are in that process? Thank you.

Hey, Larry, this is Dustin speaking. So on the first point on the 8-K we filed related to the amendments to our bylaws, that's really related to an updated SEC rule around universal proxy. It's very common for all companies in the process of doing some form of that, which is really just combining the ability to raise nominees and the voting aspect of it, consolidates onto the card and is part of improving and continuing to improve our overall corporate governance. And then the last piece when you talk about the Protective portfolio, in line with the prior question, we are absolutely going through the portfolio and looking at areas where we can optimize. Kevothermal is an example of that. I won't give an update relative to the status of that because we are currently in the process of dissecting many pieces, each of which takes a level of effort and energy to get through, understand, obviously, viability in the market today, value and then the disposition going forward relative to the timing. So there's no update in terms of progress, other than it's underway, and we are accelerating the pace.

Thank you. Please stand by for our next question. Our next question comes from Arun Viswanathan from RBC Capital Markets.

Thank you for taking my question. Congratulations on the new roles to both of you. I would like to delve deeper into the synergies between the two businesses and where automation and other initiatives may intersect. I'm considering the significant double-digit declines in volume for Protective. Do you believe it is necessary to take more decisive action, possibly by separating the Protective portfolio? What factors make it important to keep it as part of the current portfolio? Thank you.

I will address that question in two parts. First, there is a significant similarity in the raw materials used across both businesses. One of our key advantages is our purchasing power due to the scale at which we operate. Any actions taken should consider how to structure the relationship between the two businesses. Secondly, regarding the need for greater decisiveness, I want to emphasize that we believe we are currently at the lower end of a market cycle, which is crucial to consider when determining timing for such actions. Broader market dynamics could influence the timing of any actions taken. While some strategies may operate independently for each business, they ultimately aim for the same outcome in terms of combining materials and equipment to provide our customers with a single point of contact, enhancing service and overall value creation. That sums up our current position.

Thank you. Please stand by for our next question. Our next question comes from Gabe from Wells Fargo.

Emile, Dustin, thank you for the clear messaging this morning. I have a two-part question. First, I noticed a large customer announced they are migrating one of their locations in Ohio to a fully paper-based model. Is this what you were referring to when you mentioned working more closely with your customers? Does this require additional investment, either in operational costs or capital expenditures? Additionally, if there is a financial impact, will it affect your goal of achieving $140 million to $160 million in cost savings to support growth? I apologize if I missed that detail. The second part of my question is about the $30 million discrete revenue item you mentioned for the fourth quarter. Can you clarify what that is related to? Also, I recall you mentioned that price pressures would be a headwind going into 2024, but specifically for Q4, given the recent changes in polyethylene pricing, can you provide an estimate of the impact, perhaps in the range of $5 million to $10 million?

Yes. Great question. So I'm going to hit the first question you have around the discrete item, and then I'll bring it back to Emile, he'll walk through your points around kind of paper-based solutions and where we are headed. So on the first one for what we call it out for the fourth quarter, a non-operational issue with FX. If you think about where we were in July and then where we are now today and where the GBP and the euro moved, that's creating an FX impact in the fourth quarter to the tune of about $30 million. The secondary point we made to that was that underlying volume estimates are still intact for both businesses. I'm going to turn it to Emile to head on the question.

Yes, on the first question, I mean, it's broader than just paper or plastic. It's really around the sustainable offerings that we bring to the marketplace, and that's both on the Protective and Food sides. So yes, getting closer to our customers so that we are at the table helping our customers choose the right solution. You can see in our parts of our portfolio, we were light, and we've seen some of that impact in terms of that share loss, but our paper solution continues to make progress on the Protective side, both on the automation piece of Protective as well as on the material side. On the Food side, we are continuing to push on our sustainability pledge around bringing our solutions to being 100% recyclable or usable. Just to give you a perspective, we are around 51% of the portfolio away today. We did try to bring in that plant-based roll-stock solution. Unfortunately, that was not successful in the market as the market shifted. We will be shortly announcing interesting, sustainable solutions we'll bring into markets around roll-stock. But let's talk about that in our next call.

Thank you. Please stand by for our next question. Our next question comes from Mike Roxland from Truist Securities.

Thank you. In Food, obviously, you mentioned the company has mentioned in the past facing growth headwinds, you mentioned again kind of U.S. cattle cycle customer preference shift in meat, the Food automation slowdown. Can you talk about any of the initiatives you started to pursue, maybe you've accelerated in your to reverse that and to drive better growth? And then just quickly on the second question, if you take out Liquibox in 3Q, what would Food volumes have grown or declined ex Liquibox? Thank you.

Great questions. I want to clarify the comment on automation. It is performing very well this quarter and for the entire year. However, looking ahead from a sales perspective, we are experiencing some pressure related to orders, which reflects expectations for 2024. When a customer buys an automation solution, there is a significant lead time for delivery, indicating the future market outlook, but the demand remains strong. Our products are still relevant, and we are dedicated to promoting these platforms in both sectors. Regarding the Food segment and the cattle cycle's effects this quarter, we will be accelerating our initiatives. As Emile mentioned about our competitive positioning in specific products as part of our strategy to cut costs and grow within Food and Protective, we are particularly focusing on our roll-stock business and enhancing our competitiveness in the bag segment and the food automation within that sector. This year, we have been performing better than the market, despite some negative trends. In our roll-stock business, which faced challenges due to specialty resin prices last year, we are currently dealing with increasing competitive and pricing pressures. Our efforts are directed towards reducing costs associated with serving, delivering, and producing in this area, allowing us to be more competitive and relevant in the market as we aim for growth in 2024.

Thank you. Please stand by for our next question. Our next question comes from Phil Ng from Jefferies.

Hey, guys. Dustin, you kind of breeze through your early 2024 outlook. So I just want to make sure I heard you correctly. You're effectively going for flat sales, up volumes and up EBITDA in 2024. Can you kind of help unpack the components a little more between how you're thinking about volume growth between the two segments, particularly Protective just because it's been under pressure, price cross and then progress on the restructuring efforts? I think last quarter, you were calling for mid single-digit EBITDA growth. I don't know if that's still achievable, especially with the FX headwinds you're seeing at this point.

Yes. Great question. Thank you for raising it. A couple of comments. Keep in mind that right now we are sitting in November; we talked about this limited visibility environment we are operating in. When we think about the Food business, the cycle, we still believe the beef cycle in general is going to be a headwind. 2024 is seen more as a trough year than in prior. But keep in mind, we are still ahead of the market. We gained share this year. We continue to gain share going last year into this year and going into next year. We think gaining share is going to help alleviate some of that concern. In our Food business, the competitive positioning in our roll-stock portfolio, the improvements we plan to make there, we believe the combination of these, coupled with what Emile alluded to in some of our newer sustainable offerings, will provide us some lift and get us to low single-digit volume within our Food business. Protective, again, it is conditional based on markets beginning to move with us. If you think about the year of 2023, the downside is you see it go down, and obviously, 2020, and now you're seeing 15% down in volume in the fourth quarter; you're going to be looking at mid-single-digit decline, which gets hit by price. The positive news within that, and Emile mentioned earlier, is a statement about volume stabilization throughout 2023, really since the beginning of this year. As soon as markets begin to inflect and we are seeing that, right? And it really is going to be a statement about the strength of our fourth quarter cycle. The stronger our fourth quarter is from a seasonal perspective, we are very indicative of how we head into next year. That is what we are speaking to. Again, broadly speaking, Cost Take-Out to Grow, etc., that is intended to continue to improve our overall competitive positioning within Protective.

Thank you. Please stand by for our next question. Our next question comes from George Staphos from Bank of America.

Hi everyone, thank you for the follow-up. Regarding your discussion, I appreciate the detailed insights and the clearer presentation. Can you share your thoughts on the percentage of your portfolio in Food and Protective that is currently at a disadvantage on the cost curve compared to your competitors? How much could Cost Take-Out to Grow and other initiatives help you catch up in those areas if necessary? Additionally, some of your competitors have noted small victories in the protein markets lately, which seems new to us. Can you explain why you believe you are gaining market share despite these challenges? Thank you, and good luck this quarter.

Thank you, George, for your comments on the slides. I want to address a few broader points about the Food sector. I understand the comments regarding competition for market share in our Food business. To clarify, we are performing well compared to our competitors and the overall markets we operate in, particularly in the protein segment where we have significant market share, namely in beef and pork. We do not perceive any substantial competitive threat in our bags business or the automation solutions we provide. From my perspective, we have a competitive advantage that we plan to maintain in the near future. Regarding your question about Q4, we are confident that our growth in market share comes from winning over not just small customers, but also large customers and significant plants from our competitors. This trend has already contributed positively to our performance this year and will continue to support our growth next year. When we discuss the areas of our Food portfolio that are sensitive to pricing, we estimate that about 10% to 15% of that business falls into this category. In our roll-stock segment, we see varying levels of competitive differentiation. In areas where differentiation is lower, we are focused on rationalizing costs to remain competitive on pricing, which becomes more crucial than the product differentiation itself. In our Protective segment, we mentioned previously that the areas more sensitive to pricing are not linked with our automation offerings, accounting for about 20% to 25% of that portfolio. The positive aspect is that, despite dealing with different products, the overall manufacturing and innovation processes, along with the cost to serve, remain quite similar. While it may seem like a significant portion of our portfolio, tackling pricing issues in these areas can actually be simpler due to fewer applications compared to our roll-stock business.

Yes. And George, I would just add on the roll-stock part of the portfolio. Also the fact that we have pigeonholed ourselves into very niche premium markets. Right now with the consumers downgrading to different products, we intend to open up the aperture of our roll-stock business, not just to stay in the corner market, but to pursue a broader set of opportunities.

Thank you. I am showing no further questions at this time. I would now like to turn it back to Emile for closing remarks.

I would like to thank everyone for their time today. Dustin and I are excited about the opportunities ahead for SEE, and we look forward to speaking again in February. Thank you.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.