For the fiscal year ended December 31, 2021
Business
Sealed Air Corporation (“SEE”, “Sealed Air”, or the “Company”, also referred to as “we”, “us”, or “our”) is a leading global provider of packaging solutions integrating high-performance materials, automation, equipment and services.
SEE designs and delivers packaging solutions that preserve food, protect goods, automate packaging processes, and enable e-commerce and digital connectivity for packaged goods.
Our packaging solutions are designed to help customers automate their operations to be increasingly touchless and more resilient, safer, less wasteful, and enhance brand engagement with consumers.
resilient : able to recover quickly after something unpleasant such as shock, injury, etc. / (of a substance) returning to its original shape after being bent, stretched, or pressed
wasteful : using more of something than is necessary; not saving or keeping something that could be used
We deliver our packaging solutions to an array of end markets including fresh proteins, foods, fluids, medical and healthcare, e-commerce, logistics and omnichannel fulfillment operations, and industrials.
omnichannel : used to refer to a way of selling products that is the same and equally good for the customer whether they are buying from a computer, a mobile phone app, etc., or in a physical shop
We serve customers across 114 countries/territories directly and through a diversified distribution network. We aim to deliver savings to our customers and accelerate payback on their investments. We invest in technology and innovation that transform our industry toward a more sustainable future.
payback : the money that you receive back on money that you have invested (especially when this is equal to the amount that you invested to start with); the time that it takes to get your money back / the advantage or reward that somebody receives for something they have done; the act of paying something back
Our portfolio of solutions includes leading brands such as CRYOVAC® brand food packaging, SEALED AIR® brand protective packaging, AUTOBAG® brand automated packaging, BUBBLE WRAP® brand packaging and SEE Automation™ solutions.
In 2021, we generated net sales of $5.5 billion, net earnings from continuing operations of $491 million, and net cash provided by operating activities of $710 million. Please refer to Part II, Item 8, “Financial Statements and Supplementary Data” for financial information about the Company and its subsidiaries, which is incorporated herein by reference.
subsidiary : a business company that is owned or controlled by another larger company
herein : in this place, document, statement or fact
We have two reportable segments, Food and Protective. Refer to “Reportable Segments” below for additional information.
Vision and Strategy
Our strategy is focused on creating an inimitable customer packaging experience by advancing packaging solutions integrating SEE Automation, Digital, and Sustainability.
inimitable : too good or individual for anyone else to copy with the same effect
SEE caring high-performance people + digital culture. We are bringing people together with a future that is more digitally connected. We prioritize our people and recognize the importance they play in realizing our purpose. Through digital platforms, we are accelerating our efforts to retain, attract and motivate top talent, train our leadership teams, develop future leaders, shape a caring, high-performance organization and culture, and drive top benchmark employee engagement.
prioritize : to put tasks, problems, etc. in order of importance, so that you can deal with the most important first / (formal) to treat something as being more important than other things
retain : to keep something; to continue to have something / to continue to hold or contain something
Creating SEE Touchless Automation™ experience. With our SEE Automation™ solutions, we aim to solve our customers’ automation needs while creating significant return on their investments through savings and increased productivity. We have focused on increasing our equipment offerings which help our customers automate packaging processes. In addition, through our SEE Operating Engine, we are automating our own operations to make them more sustainable and generate productivity savings.
Lead the industry with Digital transformation. We have launched the MySEE digital e-commerce platform to make doing business with SEE easier and more efficient. We are investing in automation and digital technologies that enhance performance, efficiency and monitoring in customers’ and our own operations. We are developing smart packaging that can enable traceability and deliver digital content. We are investing in digital printing to drive customer savings, generate demand and enhance brand image and shelf impact.
traceability : the ability to discover information about where and how a product was made
Sustainability is core to our business. Sustainability is embedded in our purpose and vision. We have set ambitious environmental goals aimed to lead the industry towards a better future. We are designing high-performance packaging materials with recyclability in mind, to make sustainability more affordable, and to create a pathway for a circular economy. We are transforming our operations and our customers’ operations with SEE Touchless Automation™ which aims to improve efficiency, eliminate waste, simplify processes, and create a safer working environment.
embed : to fix something in a substance or solid object / to send a journalist, photographer, etc. to an area where there is fighting, so that they can travel with the army and report what is happening
circular : having the shape of a circle; round / moving around in a circle / (of an argument or a theory) using an idea or a statement to prove something that is then used to prove the idea or statement at the beginning
Purpose driven capital allocation to create value to our shareholders and society. Our capital allocation strategy fuels the SEE Operating Engine and is rooted in economic value add with the goal to drive profitable, above market organic growth, and attractive returns on invested capital. We invest through capital expenditures, research and development spend, acquisitions, and investments aligned with our strategy. SEE Ventures is embedded in our capital allocation strategy. Under SEE Ventures, we invest in entrepreneurial and disruptive technologies that present opportunities to accelerate innovation and increase speed to market. Dividends and share repurchases have been used to return capital to shareholders.
organic growth : the increase in a company's sales and profits that is a result of developing its own business activities, rather than buying other companies
align : to arrange something in the correct position, or to be in the correct position, in relation to something else, especially in a straight line / to change something slightly so that it is in the correct relationship to something else
disruptive : causing problems, noise, etc. so that something cannot continue normally / new and original, in a way that causes major changes to how something is done
(omitted)
Reportable Segments
Food
Food solutions are sold to food processors in fresh red meat, smoked and processed meats, poultry, seafood, plant-based and dairy (solid and liquids) markets worldwide. Food offers integrated packaging solutions combining high-performance materials and automated equipment solutions to increase food safety, extend shelf life, reduce food waste, automate processes and optimize total cost. Its innovative materials, automated equipment and service enables customers to reduce costs and enhance their brands in the marketplace.
poultry : chickens, ducks and geese, kept for their meat or eggs / meat from chickens, ducks and geese
Food solutions are utilized by food service businesses (such as restaurants and entertainment venues) (“food service”) and food retailers (such as grocery stores and supermarkets) (“food retail”), among others. Solutions serving the food service market include products such as barrier bags and pouches, primarily marketed under the CRYOVAC® trademark and other highly recognized trade names including CRYOVAC® brand Barrier Bags, CRYOVAC® brand Form-Fill-Seal Films, and CRYOVAC® brand Auto Pouch Systems.
Solutions serving the food retail market include products such as barrier bags, film, and trays, primarily marketed under the CRYOVAC® trademark and other highly recognized trade names including CRYOVAC® brand Grip & Tear™, CRYOVAC® brand Darfresh®, OptiDure™, Simple Steps®, and CRYOVAC® brand Barrier Bags.
Food solutions are well aligned to capitalize on global market dynamics driven by increasing labor scarcity and automation, continued urbanization, growth in ship-to-home food services, growing consumer preference for smaller portions and healthier food choices, and demand for more sustainable, secure packaging. Our solutions, which include high-performance materials, equipment, and services, are designed to preserve nutrition while enhancing food safety.
Food applications are largely sold direct to customers by our sales, marketing and customer service personnel throughout the world. Sales to governments, or government contracts, are not material to our Food segment. No single customer or affiliated group of customers represents more than 10% of segment revenue in 2021.
There are other manufacturers of products similar to those produced by Food, some that operate across multiple regions and others that operate in a single region or single country. Competing manufacturers produce a wide variety of food packaging based on plastic, metals and other materials.
Protective
Protective packaging solutions are utilized across many global markets to protect goods during transit and are especially valuable to e-commerce, consumer goods, pharmaceutical and medical devices and industrial manufacturing.
With automated equipment, high-performance materials, and services, our solutions are designed to increase our customers' packaging velocity, minimize packaging waste, reduce labor dependencies and address dimensional weight challenges. Our product breadth combined with our global scale and reach helps support our customers' needs for sustainability, performance excellence, consistency and reliability of supply wherever they operate around the world.
velocity : the speed of something in a particular direction / high speed
dimensional : relating to measurements / (of characters or performances) having enough depth and substance so that people can believe in them
breadth : the distance or measurement from one side to the other; how broad or wide something is / a wide range (of knowledge, interests, etc.)
consistency : the quality of always behaving in the same way or of having the same opinions, standard, etc.; the quality of being consistent / the consistency of a mixture or a liquid substance is how thick, smooth, etc. it is
Protective solutions are marketed under SEALED AIR® brand, BUBBLE WRAP® brand, AUTOBAG® brand and other highly recognized trade names and product families including BUBBLE WRAP® brand inflatable packaging, SEALED AIR® brand performance shrink films, AUTOBAG® brand bagging systems, Instapak® polyurethane foam packaging solutions and Korrvu® suspension and retention packaging. In addition, we provide temperature assurance packaging solutions under the Kevothermal™ and TempGuard™ brands.
inflatable : needing to be filled with air or gas before you use it
polyurethane : a type of plastic material used in making paint, glue (= a sticky substance), etc.
Protective solutions are sold through a strategic network of distributors as well as directly to end customers, including, but not limited to, fabricators, original equipment manufacturers, contract manufacturers, logistics partners and e-commerce/fulfillment operations.
In 2021, approximately 55% of our Protective sales were sold through distributors. We generally do not impose annual minimum purchase volume requirements on our distributors. Product returns from our distributors in 2021 were not material. Sales to governments, or government contracts, are not material to our Protective segment. No single customer or affiliated group of customers represented more than 10% of segment revenue in 2021.
There are other manufacturers of products similar to those produced by Protective. Additionally, there are products made using alternative packaging materials that customers use to provide protection against damage to their products during shipment and storage.
Among the competitive materials are paper packaging, expanded plastics, corrugated die cuts, strapping, envelopes, reinforced bags, and corrugated boxes as well as various types of molded foam plastics, fabricated foam plastics, mechanical shock mounts, wood blocking and bracing systems, and an assortment of automated packaging and fulfillment systems. We believe that some of our direct competition within the protective packaging industry has a less diversified global presence.
corrugated : having the shape of a series of regular folds that look like waves
We believe that a focus on materials circularity, sustainability, and automation and equipment offerings will continue to define the direction of the competitive landscape into the future for both segments.
the fact of an argument or a theory using an idea or a statement to prove something which is then used to prove the idea or statement at the beginning
Additionally, some of our Food and Protective competitors have been consolidating in recent years or have been involved in significant merger and acquisition activity, and we believe this trend may continue. Such consolidation could have an adverse impact on the pricing of our products and services and our ability to retain customers, which could in turn adversely affect our business, consolidated financial condition or results of operations.
consolidate : to make a position of power or success stronger so that it is more likely to continue / to join things together into one; to be joined into one
(the rest omitted)
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