Sealed Air Corporation (SEE) Earnings Call Transcript & Summary

So without further ado, I give it over to Tobias. Tobias?

Good morning, George. Can you hear me okay?

I can hear you fine.

Perfect. Good morning, everyone. Just a quick introduction here. Sealed Air is a global leader in automated packaging solutions and high-performance packaging materials for fresh proteins, foods, liquids, beverages for protecting goods that are shipped around the globe. Our purpose, we're in business to protect, to solve critical packaging challenges and make our world better than we found it, is centered around our automation, digital and sustainability growth strategy. Now if we move to Slide 4, please, you can see our broad portfolio, diverse end markets and iconic brands. Some of our new solutions are on the slide, and the play button in the center is to encourage all of you to visit our website where you'll find customer success stories and videos. We design our packaging solutions to maximize food safety, minimize waste and protect goods shipped around the world. We're a global organization with 65% of our sales derived from the Americas, 20% from Europe, Middle East and Africa and the remaining 15% from Asia Pacific. Our global scale and reach has allowed us to meet the evolving changes in our markets. We have flexed our manufacturing network to meet demand surges, which has proven to be a competitive advantage to us, especially in the environment we are living today. As I mentioned, our growth strategy is centered around automation, digital and sustainability, which I'm sure we'll spend some time talking about it today. Now if you can move to Slide 5 and talk about the results of 2020, I want to point out here on the slide our strong 2020 results. We delivered over $1 billion in EBITDA on nearly $5 billion in sales, and our top line increased 4% in constant dollars. We have industry-leading EBITDA margins at 21% and operating leverage of 77%. We converted more than half of our EBITDA dollars into free cash flow, generating $556 million in 2020 and an ROIC of 15%. We serve a stable market that grows about 1% to 3% a year. We're driving our business to 3% to 5% organic sales growth. But how are we going to get there? Our innovation and our focus on sustainability is expected to deliver above-market growth and get us to 2% to 4% growth. And then an additional 100 basis points is expected to come from our automation strategy. Our Reinvent SEE business transformation is becoming our continuous improvement program that will drive productivity gains. Beyond 2021, we are driving towards an operating model that's expected to deliver over 30% operating leverage on sales growth of 3% to 5%. So George, let me turn back to you for questions.

Thanks, Tobias. Thanks, Alessandra. Again, delighted that you're here at our presentation. I wanted to start off with a question based on one of the things that you're talking about relative to the long-term growth outlook for the company. And we've covered the sector for a number of years. We've covered Sealed Air for a number of years. And we frequently have heard companies say, "All right, we got to pivot now. We're going to move from sort of an internal operationally-focused strategy to improving results, too. Now we're going to grow, we're going to grow." And Sealed Air certainly seems to be trying to pivot to more of a growth strategy as well. We frequently have seen companies not always hit the growth elements of their new strategies as well as they hit the margin-related strategies. So question to both of you, based on your experience at Sealed Air based on what you know about the future, why do you think Sealed Air is going to be successful in hitting the growth goals where many other companies don't?

Yes. Let me -- I can take a stab here. So driving growth volume and along with that the pricing as well are the critical focus for us. So if you think about Food, we expect 1% to 2% volume growth and 1% to 2% favorable pricing as well. On Protective, it's about 2% to 3% volume growth and 1% to 2% prices. Now as we think about growth, our volumes will be driven by a few things that are happening in the marketplace and that we're seriously pursuing to a number of things. So you take food retail demand, you see a very strong shift there. Exports demand are also very intensive around the globe. E-commerce surge that's driving fulfillment needs. That's right in front of us and has been just great over the last 6 to 8 months. And the third point around automation and sustainable solutions. We're driving a lot of our investments and our innovation exactly on those 2 points, equipment and automation and sustainable solution. Now as our investments are geared to those things, we have a very diligent process around the growth because that's a point that's where we need to grow. And the focus on -- on top of that, we have the Reinvent SEE, which is helping us generate the savings, generate the actions that are going to help us be very competitive in a different position in the marketplace in the marketplace.

So Tobias, if I could piggyback on that comment, and thank you for going through that. Again, a lot of companies are also focusing on e-commerce and on sustainability. What do you think differentiates -- you don't have to spend a lot of time here, but what do you think differentiates Sealed Air versus peer companies who are focusing on the same growth drivers?

Yes. If I can point you to our Slide 4, and you can see a lot of our new solutions. So if you look on that slide, on the left side, you see the protein includes related solutions. Now in protein, as I said, retail-driven products where freshness and smaller portions are needed as customers continued to think about sustainability. If you see protein, our automation solutions, all the labor scarcity that we have faced, all the productivity needs of a lot of companies, this is right in the front of our automation initiative, and you can see here on the left side of the slide. Also fluids getting to new applications. On the right side on this slide, you see the protective solutions, and there's drive for differentiated materials, recyclable, reusable, made it from recycled content. So all of those are growth drivers for us, and we are leveraging all of those solutions from region to region.

Understood. Thank you for going through that. So as we think about Sealed Air in early March of 2021, let's fast forward, March 2022, we're having the same presentation and we're reflecting back on what made 2021 a really good year for Sealed Air. What are the 2 things that are controllable that you need to get right for to be a really fantastic year for the company? And then the related question I had for you, the company provided its guidance a few weeks ago. I think $3.25 to $3.40 in earnings, $1.1 billion to a little bit over that for EBITDA in terms of the range. What gives you comfort -- what gives the company comfort in terms of that guidance outlook? And is there anything in the public domain that you can point to that would support the confidence or your own view?

Yes. So I'll start saying that it's all about execution. And you touched on one, which is about growth opportunities, how we're going to execute against our growth opportunities. And I talked about this diligence process that we have we're really pursuing around automation, digital and sustainability, which are the key drivers of our strategy. The second point is around execution on our Reinvent SEE business transformation. Now as I said, we're benefiting from retail and export demand in food, but also in e-commerce and the strength that we're seeing in the Protective side. In addition to that, the need is, therefore, automation and sustainable solutions. We talked to many of our customers. They're all looking for investments, how to automate their processes, how to improve productivity? So that's both in Food and Protective side of customers. So strong focus on growth, discipline around Reinvent SEE, and this will certainly alleviate some of the raw material headwinds that -- and as we see also the recovery of the industrial on the foodservice side.

Thank you, Tobias.

Now to your -- yes, okay.

No, please go ahead.

You know I was going to say, just to complement, the volumes will be driven, as I said, by food retail demand and exports demand, e-commerce fulfillment, automation, sustainable solutions. Actually, those are the key things for our growth.

I was maybe going to piggyback. Are there any things in particular within Protective packaging? We talked about automation. We talked about e-commerce. Alessandra, you have background here, obviously, as well. Any other things that we should look for in terms of a mile marker that will make 2021 a good year?

Yes, no, good question. When we looked at, in Protective, through this pandemic, right, consumers were forced to shift their buying behavior to online. And even though the population is now getting vaccinated, there is a strong belief and the statistics have shown that once the consumer starts shopping online, they typically stay online. So our outlook for 2021 in Protective, it is 3% to 5% constant dollar growth, with 2% to 3% volume growth and 1% to 2% favorable pricing. In 2020, our organic volume was relatively flat, with a tough first half of the year due to industrial shutdowns and a stronger second half with the surge in e-commerce. And also in Q4, we saw industrial starting to rebound. So recognizing growth will normalize in e-commerce. And thinking beyond 2021, we see a strong secular growth drivers for e-commerce fulfillment and packaging, especially for automation. We had a broad portfolio of automated solutions that are designed to address labor shortages, increase throughput and at the same time, minimizing waste and driving plastic secularity and reducing the carbon footprint. So you know I -- yes...

No, no. Please, go ahead, sorry. Sorry, Alessandra.

No. I just want to -- your comment -- your question about the growth, I just want to say that thinking the long-term operating model for Sealed Air as a whole, as Tobias mentioned, we are driving towards a 3% to 5% top line growth, with an understanding that e-commerce will be one of the fastest -- faster-growing end markets, driven by automation, sustainability and consumer buying behaviors.

Thanks, Alessandra. Tobias, back to you, again, on the same topic. There's been some commentary in the trade press about the winter storms in the U.S. perhaps impacting the cattle cycle, which, obviously, you have a fair amount of experience with overall, given your background in food care. What would you have us ponder in terms of the cattle cycle relative to what's happened in terms of the winter freeze? And in turn, what it means for for the Food packing business this year? Minor stumbling block, something you really need to manage against. And obviously, you don't control all this, it's really your customers. But what would you tell us about this as it relates to the outlook?

Yes. So George, let me take the -- address the cattle cycle part of the question first. So we estimate the global protein market, including cattle, to be slightly up in 2021. And if you think about cattle, in particular, North America and Brazil will drive the growth. But that's also going to happen in pork and poultry. The demand has been pretty strong, I would say, and should be very supportive of that 2021 picture. Now a lot of that is led by retail that we see happening, that's continuing this year that we started seeing last year. Exports are -- it's a drive, and we'll continue to grow the net in 14 countries, such as China, have their needs, and that's not going away, that will enhance. ASF is an impact. China is not going to get back to normal, not even before 2022. Australia will rebuild their herd and will support the Asian shortages that we see. So the situation remains very favorable for a continuation of this, not only in 2021, but also in 2022. If you think about automation, food safety, productivity are all top of mind for food processors. This is -- we talk to them, that's what we hear every day, they're both pressing need for a route. Last point around the -- we see still large conversion that can happen on the wet markets that we see in Latin America and Asia. So lots of opportunities there. To the second part of your question, we saw very, very minimal impact on the processors over that week period where we saw those extreme temperatures and some of the shutdowns. It was a tough week for processors where we saw about 11% decline in cattle compared to same week of previous year. And in the following week, we already saw a pickup of 6%. So there's continuous pickup. I think they navigated through this in a very smooth process. And so no real short-term impact that we're seeing there.

Tobias, that's great. And more broadly, we read a lot about the processing factors headwinds that your customers were going through in North America, but elsewhere, again, because of COVID and social distancing to the extent that you have a view on this that you could share. If 100% -- or 100% is normal, where would you rate your customers' ability now to process, which in turn would be better not worse, for your demand? Is it 105%? Is it 82%, broadly?

Yes. That's a difficult number to peg because you see different segments of the Food customers and Protective customers. And the way you see, a lot of the increased demand that we saw as an example on Protective, is driving tremendous demand for -- around fulfillment. And speed is needed. Improvement of productivity is needed. So you need automation there. So that's where we're hand-in-hand with those customers supporting them and looking through those automation solutions that we're offering. On the food side, we see a very diverse situation. So the worst extreme situation we saw as an example on the protein processes that happened back less than 1 year ago. We saw them really stepping up their processing on Saturdays. They are really trying to -- because demand was there. So they did everything they could, despite of all the labor challenges, despite of all the issues they face on making sure putting the right product out of the door with retail taking much more demand in foodservice. So again, hard to give a number here, but we saw very different types of impacts. And we responded very strongly and very effectively and very fast to those increased needs that we saw from those segments that I mentioned.

Thanks, Tobias. I wanted to again, maybe hit out kind of a near-term to intermediate-term question, then we'll switch gears a bit. Frequently, the question that we get as analysts covering the sector, covering Sealed Air, is around the following framework. We understand the growth drivers for Sealed Air. We understand the long-term cash flow prospects for the company and its track record for that matter. But -- and Sealed Air is not alone. But whenever there's inflation in the underlying raw material, it seems to either -- from a processing standpoint or an operating standpoint, I should say, or stock standpoint, for that matter, which you can't control, one of the thing is headwind for the company and for the industry. What is the company doing differently now, say, versus a few years ago or beyond that so as to manage the input cost inflation so that the company can continue to perform and show, for that matter, good stock performance because, ultimately, you're a public company even as resin costs are moving up very, very quickly? What would you say to investors on that?

Let me frame this in 3 different angles to you, George. So input costs, right? So if you're referring to resins and all that, remember that resins are about 30% of our cost of goods. And we purchase resins globally. It's not only about an individual resin and all that. So we have our Reinvent actions that are ongoing to mitigate inflation and pressures that we see from that end. And as I said, Reinvent is a process. It's a new approach that we've embedded. It's not a program or initiative that has an end at one point in time. We're very active in protecting our margins. We're very active in the sense that we have a set of our business, about 20% of our business there on formula. So that's a natural protection. Where we don't have that protection we're very active, and we have been since last year adjusting our prices. And really -- and we're continuing to do that into Q1. We'll continue to do that in Q2 with a number of actions there. So managing our resins, managing our Reinvent initiatives, managing our margins through prices give us the confidence to navigate to somewhat different than what we saw in the past. So still we have -- we really focus on delivering the right solutions for the customers, having the right price with them and make the products sustainable.

Tobias, how much did you say this on formula? I missed that. I just want to make sure I got that correctly.

Yes, about 20% of our overall global and remember that...

20% global?

Yes. Remember that food -- that's mostly on food, but also protected. And food, it's about -- North American foods is about 55% of our total food business, on which 60% to 65% are on formula.

Thank you for that. I want to switch gears. When you think about the various products that the company and platforms of the company is promoting, whether it's automation, and these will be interconnected, whether it's liquid pouch packaging or FlexPrep, whether it's Darfresh On Tray, what are you most positive on in terms of the growth outlook? What do you think is going to be most accretive to your 2021 and 2022 outlook? And related question, which of your more sustainably oriented products do you think will be most accretive to your volume here?

Yes. So if you look at again our Slide 4, where you can see the breadth of our solutions, right? Look at the automation around protein. And you have the other slide that we show, our customers are coming to us. They have the need to improve productivity. They need to take care of a shortage of labor. And that's food front where we're very proactive with new technologies that we're bringing to the processors in a holistic solution where our solution and their savings are very visible, and that's how we're pricing those solutions. So right there, it's a very critical chance. If you see on some end markets like quick-service restaurants when you mentioned FlexPrep, that's already a live product and something that we're very proud of, that's driving not only speed for drive-through as an example but also savings for the customers and a sustainable solution at the end because there is shrink that's avoided, there's materials that are avoided. And then if you think about other products around Protective where we are driving differentiation with recyclable products, reusable materials, recycled content, so there are a number of products here. Just another remind to you, a plant-based Rollstock which is, again, coming from a renewable source. So we have a number of projects here that I pointed that are very exciting for us, and we're very active with customers and getting many successes.

Thank you. I don't know if you'd be in a position to comment, but if you had to think about your products in buckets where you have your more sustainable products and those that maybe aren't quite where you need them to be, and we'll just focus on the -- again, the more sustainable products, what do you think they could add to your growth in '21 or '22? Would there be much cannibalization of your products that maybe aren't sustainable? And if you don't have a figure, that's fine, but I wanted to throw the question, given the interesting discussion.

Yes. Remember, again, on that Slide 9, that about 35% of our portfolio, it's sustainable solutions that are already out there. So -- and we're targeting that to reach about 50% over the next 3 years. So as mentioned, we have a number of products that are very successful already; plant-based Rollstock, Darfresh On Tray. You have seen our investment in Plastic Energy and the partnership with a cheese manufacturers, SABIC and Tesco, for the circular solution there. In liquids, we're displacing rigid containers and pouches. In Protective, we have recycled mailer, recycled bubble wrap. Paper-based solutions for cushioning void fill. We have our Korrvu solution, which is about less packaging, more protection. So a number of those products are very exciting for us. And as I said, very significant in our portfolio already.

It's amazing Korrvu is still growing like it is. Korrvu has been around for a couple of decades, at least, for you, right?

And significant growth over the last 9 months. You would not imagine there what's happening, very, very deep. And it's a great solution because, as I said, yes, fulfillment, there's tremendous need for protection of products in all kinds of products. So Korrvu an application applied to electronics, the different materials, even to some industrial materials. So again, as I said, it's about less packaging, but more perfection in a very unique way.

Can you use PCR in most of your applications, whether or not you're doing it right now? Do you think in post consumer, in most of your applications, whether it would be protective or food contact, which I would imagine would be a little bit more challenging endeavor. So the first question is, technically, could you do it? From an operational standpoint, could you do it? And then secondly, from your -- go ahead. I want to you to answer for that.

Okay. So as I mentioned, George, our investment in Plastic Energy, it's a great example of that. The Tesco -- and uniting a customer, a retailer, a recycler ourselves for materials production and really thinking about that circular solution. Those are the things that we're really pursuing, and this is where we're investing, as I said. So there are other opportunities that we're working on. There are the other sustainable products that I mentioned. And our innovations are all being developed with sustainability in mind.

Again, this is a broad question, and it's difficult to answer with a yes or no. So it's more kind of what your thoughts and what would your observations be to us in terms of how to evaluate it. Can the industry economically at the present time extract post consumer and ultimately get to packaging converters for further use? Can you profitably at this juncture use PCR in -- across your applications? And I realize post consumer is just one element of the sustainability solution set. But what are your thoughts there? And what should we take away as regards to Sealed Air?

Yes. And as I said, maybe a difficult question, but profitability will vary. It's the raw material ends up costing more. We're very wary that we need to work through our manufacturing efficiencies and position the product as a premium too. So it's a combination of how you look at the solution, what's the value that's brought to the customer. And at the same time, how can we operate internally through our processing and new technologies to adjust to have a competitive product in the marketplace. Now we -- you have to look at the true context of our solutions that include automation, differentiated materials, the drive to -- for value of the customer, helping them with branding, we're investing a lot on ways to differentiate our customers branding to digital printing and many other things. So I would put that in the context of our solutions and not necessarily just isolated to that point because that's how we're approaching that. It's for the food solution and then working those pieces.

Thanks, Tobias. I want to switch gears a little bit. And also, again, I want to welcome the audience if they have any questions for us to pose on your behalf to Tobias and Alessandra. You know when we look at Sealed Air historically, it's always been a very cash accretive business, right? Many times investors focus on free cash yield, which is free cash flow divided by the market cap. We frequently look at as an indicator of business quality, free cash yield in terms of free cash flow at the bottom line relative to the revenue that you generate. And historically, Sealed Air has been amongst the top companies in our world. On average, $0.07 to $0.10 of every dollar revenue you generate will go towards -- will get to free cash flow. Having said that and despite that sort of attribute, Sealed Air has been a stock that hasn't necessarily performed in line with packaging peer companies in stocks and the broader market, which most of our packaging paperwork companies haven't performed in line with the market. So you've got a business that generates a lot of cash flow and yet the market has not deemed it sufficient to drive a higher stock price. Sealed Air has underperformed. What do you think -- what's the takeaway to the 2 of you and to senior management about capital allocation going forward so as to ultimately drive a better return for your shareholders because at the end of the day, you're a public company. How would you have us think about that?

Alessandra?

Yes. Sure. So let's talk about our capital allocation strategy. If we look at Slide 12, we will continue to take a disciplined approach to maintain a strong balance sheet while we are driving -- continue to track the returns on invested capital. We are driving an EVA model with ROIC focused. We ended 2020 with an ROIC of approximately 50%, and that is top quartile in the packaging industry and well above our weighted average cost of capital. On the share repurchase front, at year-end, we had $675 million remaining in our authorized plan, and we will continue to buy shares opportunistically in this market. We are confident in our growth strategy, and we have been executing very well on the Reinvent SEE business transformation as Tobias highlighted in the previous questions. As far as capacity, we are investing in capacity to support the secular growth opportunities that Tobias talked about in automation, digital and sustainability. Approximately 40% of our organic CapEx is focused on growth. SEE ventures. So let me talk a little bit about SEE ventures, which includes selective minority investments in early-stage technologies focused on automation, digital and sustainability. These investments will help accelerate our strategy and complement our internal innovation efforts across Sealed Air. So let me give an example, and Tobias mentioned this as well. For example, in Q4, we have increased our investment to $8 million in Plastic Energy. And this is an industry-leading start-up company with advanced recycling technology, so George to your question about recyclability. And in early 2018, we invested a similar amount in Pharmapacks, which is a leading e-commerce enablement platform, and we recorded a $15 million gain on this investment in Q4, and this was treated as cash flow item and excluded from our adjusted EBITDA in Q4. We acquired Automated Packaging Systems 1.5 years ago, and the integration has gone very well. It is very synergistic with our overall automation strategy. When you look at what Automated Packaging Systems has, as far as solutions, mostly heavily focused on industrial, and we're bringing those solutions into automation for e-commerce fulfillment and also food, when you look at food secondary packaging or frozen and also vegetables, fruits and so on. So on Automated Packaging Systems, the EBITDA, when we acquired the company, was 14%, and we ended 2020 at 20%. So about 600 basis points improvement on profitability. So we executed well. We want to overall maintain a healthy balance sheet and stayed disciplined to our EVA model with an ROIC focus. As far as the industry, a little bit of your question, George, on the industry, the overall packaging industry, the packing sector has interesting times ahead with the secular growth opportunities that really give Sealed Air a sweet spot. So first, increased demand for packaged goods in mature and emerging markets; second, continued growth in e-commerce and online shopping; and third, the need to address labor shortages at protein packaging plants and fulfillment centers through automation. And of course, let's not forget the demands on minimizing waste in a circular economy. So definitely, we are -- have been executing very well on our Reinvent SEE business transformation, and we are confident on our growth strategy.

Tobias, Alessandra, that was terrific. One question I had as I was listening to all the areas that you have to invest in. And you mentioned the 15% ROIC. And you mentioned using EVA to manage a business, which, given our experience over time, if you do it on a distant way will actually lead to a stock outperformance. There are 2 other companies in our world that have done that over the last 25 years and they've been 2 of the best-performing stocks in the sector. Can you keep applying capital into these new growth markets and earn a comparable margin, EBITDA margin and a comparable return on capital so that 15% could be 18% or 19% or 22% at some point? I'm not trying to -- if you want to give a number, I'll take it, but I wasn't trying to get you to get the number out today. Can you -- are these markets more margin accretive, more return accretive? Or no, they're not, and you'll get growth, but perhaps at a lower margin or low return, how would you have us think about that?

Alessandra, are you going to take that?

Yes. I'll take that. So George, as we mentioned, we look at opportunities and investments we are making in automation, digital and sustainability with the EVA model, and that looks at our weighted average cost of capital. As I mentioned, the ROIC focus, and we want to be, of course, accretive and driving towards that EVA model. It is -- we are -- as I mentioned the ROIC, it is top quartile in the packaging industry. And we would rather focus on the investments that we're talking about and be driving towards an ROIC, which is above our weighted average cost of capital with that EVA model focus. We are not -- I mean, we're not going to say that 15% is going to go to 17%, 16%, 20%, no. What we are focused on is really the driving investments that are accretive and focus on automation, sustainability and digital.

And back -- your implicit point is, don't focus so much on the return on capital figure per se, but rather the spread over your cost of capital, would that be the correct summary?

Exactly. So it needs to be -- the ROIC focus, it is accretive to our weighted average cost of capital and that's how we are evaluating our opportunities and investments. It is accretive returns on invested capital. And not necessarily targeting to be at 16%, 17%, 18%, that's not how we are assessing. We are driving an EVA model with an accretive returns on invested capital.

Do you think those markets are likely to be more or less volatile over time? So are the areas that you're investing in potentially requiring a higher threshold cost of capital to gauge against or to compare against? Or no, they are equally stable, equally volatile relative to the rest of your business. How would you have us think about that?

Yes, not necessarily, not necessarily. We're different than the rest of the businesses. We are the -- overall, the packaging industry, it is a stable industry. And as Tobias mentioned, when we are looking at our SEE operating model, the growth we are targeting, it is above market, and that is going to come from innovation and sustainability and with also 100 basis points -- an additional 100 basis points coming from our automation strategy. So we are operating in a stable market. And we will grow above market with our focus on innovation, sustainably, and then the automation strategy will bring an additional 100 basis points on that growth -- on our growth targets.

Thank you, Alessandra. Very, very clear. One last question maybe to wrap up for Tobias. We tend to think about e-commerce usually from a protective packaging standpoint. And that's obviously relevant and important. But we had a panel yesterday on the corrugated market, and there's certainly much more food that's being delivered to the doorstep. What are the opportunities for Sealed Air to utilize e-commerce to leverage the suite of food packaging and automation platforms that you have? Is that something that could be more accretive because it's perhaps a more abusive distribution process getting to our homes? How would you have us think about the upside, the margin potential there, the overall volume potential there?

Interesting -- thanks, George. Interesting that you asked that question because it's something we've been talking with our customers about every day. And you're right. I mean, there is an increased demand for food to be delivered at home. And that's where we play in various ways. Protection itself, right? Think about a fresh protein that needs to be delivered to home at the right temperature. So our temp solutions that we have in any shapes and forms, we're right there with our customers talking about that and helping them identify a solution that's going to get that protein to the home of consumers at the right temperature with the right freshness, so that the shelf life that comes with our packaging as well meets the transit time, meets the food delivery time. So from packaging solutions to our -- even fulfillment, where some of our APS, the acquisition of a little over a year ago, we have SidePouch as an example and that we can use for frozen protein, then it's going to be delivered at home. So we touch in many fronts, packaging systems and temperature control and support to the customer in that front. So we have a holistic approach around this to have conversations with our customers and bringing them ideas because they're seeing the problem, they're facing the problems every day. So many companies are moving towards that. And we're at forefront to help them with our existing solutions. But again, how we do this in a holistic way, that's the differentiator for Sealed Air.

That's great. Thank you, Tobias. Thank you, Alessandra. Wonderful presentation. Lori, we know you're there. Thanks for putting us together as well. Everyone, hope you enjoyed the presentation with Sealed Air, and hope you enjoy the rest of the conference. And we'll see you soon. Have a great day, everybody.

Thank you.

Thank you. Have a great day.

Bye.