Sealed Air

Sealed Air admitted it was continuing price hikes even though input costs are going down & told investors it had “accelerated pricing actions” in 2021

Sealed Air CEO: “Starting in Q2 2021, in response to inflationary pressures, we accelerated pricing actions.” “Ted Doheny — President and Chief Executive Officer: Protective volumes surged in the first half of 2021 on the heels of 2020 industrial shutdowns and growth in fulfillment around the world, particularly in EMEA. We faced tougher comps in the second half of 2021. However, fulfillment automation sales were up and industrial demand was favorable. Starting in Q2 2021, in response to inflationary pressures, we accelerated pricing actions.” (Sealed Air Q4 2021 Earnings Call, 2/17/2022)

When an analyst asked if lower input costs would change the planned hikes, Sealed Air executives admitted the price hikes would continue 

An analyst noted the “declines in resin prices” and asked “how the formula pricing will be affected?”“Arun Viswanathan — RBC Capital Markets — Analyst: Great. Thanks for taking my question. We’ve seen quite a few declines in resin prices in the last couple of months, although the tide seems to be switching a little bit in the last couple of weeks, and then we also have increased feedstock costs on the energy side. I guess when you think about all of that, maybe you can just help us understand how the formula pricing will be affected? And is there any unusual impact on your European operations? Thanks. ” (Sealed Air Q4 2021 Earnings Call, 2/17/2022)

The Sealed Air CFO said “we’re on top of it relative to the pricing actions” before admitting “there are certain improvements in some of that resin pricing.” “Chris Stephens — Senior Vice President and Chief Financial Officer: Yeah. Thanks, Arun, for your question. So yes, I guess the volatility continues. I think we’re on top of it relative to the pricing actions we talked about for the past three quarters now. But what we’re seeing is, you’re right, there are certain improvements in some of that resin pricing. But we get — we have specialty resins. So it’s not just on one, it’s many. So you’re talking about other resins that are increasing as well as chemicals. ” (Sealed Air Q4 2021 Earnings Call, 2/17/2022)

Sealed Air’s CFO said it had no plan to reduce resin prices: “Your point on formula-based pricing is that we’re in the middle of that, and we would expect that to continue somewhat.” “Chris Stephens — Senior Vice President and Chief Financial Officer: So we look at all of the raw material and just get a good sense of what we’re anticipating for this year heading into it and making sure our pricing is as close as possible to that. Your point on formula-based pricing is that we’re in the middle of that, and we would expect that to continue somewhat. And it takes about six months for that to kick in and the same effect has when it does come down. We’ll get the benefits over a six-month period. ” (Sealed Air Q4 2021 Earnings Call, 2/17/2022)

Sealed Air’s CFO: “ formula-based pricing is intact. We don’t expect an immediate change anytime in the near future as it relates to that, even if there’s improvement in that resin pricing.” “Chris Stephens — Senior Vice President and Chief Financial Officer: So bottom line, formula-based pricing is intact. We don’t expect an immediate change anytime in the near future as it relates to that, even if there’s improvement in that resin pricing. And again, we buy multiple different grades of that and specialty type of resins that are embedded in our formulas. But Ted, maybe some other comments. ” (Sealed Air Q4 2021 Earnings Call, 2/17/2022)