Sealed Air SEE Business Risk Report

I. Market Risks

A. Competition in the packaging industry

1. Impact on market share and pricing: Sealed Air faces significant competition from both global and regional packaging companies. This competition puts pressure on Sealed Air to maintain or reduce pricing, which can impact the company’s market share and profit margins.

B. Economic downturns affecting demand for packaging solutions

1. Potential decrease in customer orders: Economic downturns can lead to reduced consumer spending and decreased production by businesses, resulting in lower demand for packaging materials. This reduction in demand can adversely affect Sealed Air’s sales and operational performance.

II. Operational Risks

A. Supply chain disruptions

1. Dependencies on key suppliers: Sealed Air relies on a network of suppliers for raw materials such as resins and other packaging components. Disruptions in the supply chain, due to political instability, transport disruptions, or supplier failures, could impact production timelines and costs.

2. Mitigation strategies: To minimize supply chain risks, Sealed Air diversifies its supplier base and maintains strategic inventory levels to ensure a continuous supply chain operation.

B. Manufacturing disruptions

1. Machinery breakdowns impacting production: Sealed Air’s manufacturing efficiency highly depends on the functionality of its machinery. Unexpected breakdowns can lead to significant production delays and increased costs.

2. Mitigation strategies: Sealed Air employs regular maintenance schedules and has backup systems in place to minimize the downtime caused by machinery failures.

III. Regulatory and Compliance Risks

A. Environmental regulations affecting product offerings

1. Impact on production processes and costs: Increased environmental regulations can require Sealed Air to adjust manufacturing processes or develop new compliant materials, potentially leading to higher operational costs.

B. Trade tariffs and policies

1. Disruption of global supply chains: Changes in trade policies and tariffs can affect Sealed Air’s cost of imports and exports, impacting margins and operational efficiency.

2. Mitigation strategies: Sealed Air actively monitors global trade policies and adjusts its supply chain strategies accordingly to mitigate impacts from tariffs and trade barriers.

IV. Financial Risks

A. Currency exchange rate fluctuations

1. Impact on international operations and profits: As a global company, Sealed Air is exposed to currency exchange rate fluctuations which can affect the company’s earnings reported in U.S. dollars.

B. Debt obligations and interest rate risks

1. Increase in borrowing costs affecting financial health: Fluctuating interest rates can affect the cost of Sealed Air’s existing debt and its ability to secure favorable financing in the future.

2. Mitigation strategies: Sealed Air utilizes financial instruments and strategies such as hedging to manage exposure to interest rate fluctuations and maintain a healthy debt level.

V. Technological Risks

A. Cybersecurity threats

1. Data breaches and potential loss of sensitive information: Sealed Air operates in a digitally-connected environment, making it susceptible to cybersecurity threats that could compromise sensitive corporate or customer data.

2. Mitigation strategies: The company invests in advanced cybersecurity infrastructures and conducts regular employee training to safeguard against data breaches.

B. Technological disruptions in packaging solutions

1. Need for continuous innovation to stay competitive: The rapid pace of technological advancement in the packaging industry necessitates continuous research and development by Sealed Air to stay competitive.

2. Mitigation strategies: Sealed Air invests heavily in R&D and actively seeks partnerships with technology providers to integrate the latest innovations into its product offerings.