Sealed Air targets savings in organisational restructure
The plan, which involves a reduction of around 400-500 employees, has a total cost of $180-200m with $65m in one-time cash costs for 2013.
Jerome A. Peribere, president and CEO, said: “We must continue to adapt our operating structure to the economic environment in each of the regions we serve. As a result, we are announcing an earnings quality improvement plan aimed at delayering management and making us more cost efficient, especially in Europe.”
In their Q1 earnings results the firm said the “delayering” will result in a learner organisation structure, which is better aligned and more accountable to customers and would improve earnings over time.
Costs of $100m are expected to be incurred in 2014 with the focus of the program being Industrial and Laundry but it also affecting Food and Beverage, especially in Europe.
Food & Beverage (F&B) Division
In the Food and Beverage (F&B) Division net sales increased 1.9% on a constant dollar basis and 0.8% on a reported basis.
F&B achieved 1.8% higher volumes, led by 2.5% volume growth in hygiene solutions and 1.7% volume growth in the food packaging businesses.
Price/mix was higher by 0.1%, primarily due to strength in Latin America, which more than offset pricing pressures in Europe and the impact of contract pricing in North America.
F&B achieved double-digit volume growth in Asia, Middle East, Africa and Turkey (AMAT) and Latin America, offsetting slight declines in Europe and North America.
F&B Adjusted EBITDA increased 4.1% to$131m, or 14.5% of net sales, compared with $126m, in 2012, primarily from higher volumes, operational efficiencies and reduced expenses.
Reported operating profit was $93m for first quarter 2013, compared with $82m in 2012.
Protective Packaging (PP) Division
In the Protective Packaging division net sales decreased 0.8% on a constant dollar basis and 1.2% on a reported basis.
Protective Packaging achieved 0.1% higher volumes, offset by 0.9% lower price/mix, and unfavorable currency translation of 0.4%.
Growth in North America was more than offset by volume weakness in Europe and to a lesser extent Japan, Australia and New Zealand (JANZ) on continued manufacturing weakness in those regions.
Adjusted EBITDA decreased 4.6% to $58m, or 14.9% of net sales, compared with $60m of net sales, in 2012. Adjusted EBITDA decreased on unfavorable mix and negative price-cost spread partially offset by reduced expenses.
Reported operating profit was $47m for first quarter 2013 compared with $51m in 2012.
Peribere added: “We continue to expect modest sales and Adjusted EBITDA growth, despite our significant exposure to European markets and sequential escalation in raw material costs.
“We have taken and will continue to take pricing actions for those product lines impacted by escalating raw material costs.”
