New products push up Sealed Air sales in 2010
Fourth quarter sales increased 6 per cent to $1.21bn, in line with previous quarterly rises, taking full year sales up to $4.49b.
Sealed Air linked the higher sales numbers to a focus on getting new products to market.
“During the year, we remained focused on growth by successfully launching over 55 new solutions, including expanding our service-based offerings and by completing four early-stage strategic investments,” said Sealed Air CEO William Hickey.
In the year ahead, Sealed Air said it is expecting dollar sales growth across the business to continue to grow at a similar pace to 2010. Its forecast growth rate is between 5 and 7 per cent.
Food packaging segment
In the food packaging segment, which accounts for just over 40 per cent of overall revenue, sales increased 6 per cent in Q4 on a constant dollar basis. Volume growth was particularly high in Europe.
But despite the top line increase, Sealed Air said the price/mix was negatively affected by volatile currency fluctuations in Venezuela and selective lower pricing associated with higher customer volume commitments.
Over the course of the year Sealed Air was unable to expand margins in line with sales revenue. Operating margins in 2010 rose only slightly on the previous year to just over the12 per cent mark. Changing that will become a priority in future quarters.
Hickey said: “As our revenue grows we expect ongoing margin expansion, which will bring us a step closer to our goal of a 15 per cent operating margin.”
But in 2011 higher input costs and currency fluctuations may restrict the potential for margin expansion. Sealed Air said it expects low-to-mid single digit increases in resin costs compared to 2010 and “a slightly unfavourable impact” from foreign currency translation.
