Good day, and thank you for standing-by. And welcome to the Third Quarter 2021, Sealed Air Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Lori Chaitman, Vice President of Investor Relations.

Thank you and good morning, everyone. With me today are Ted Doheny, our CEO, and Chris Stephens, our CFO. Before we begin our call today, I would like to note that we have provided a slide presentation to help guide our discussion. Please visit our website for today's webcast and presentation can be found and downloaded from our IR website at sealedair.com. I would like to remind you that statements made during this call stating management's outlook or predictions for future periods are forward-looking statements. These statements are based solely on information that is now available to us. We encourage you to review the information in the section entitled Forward-Looking Statements in our earnings release and slide presentation, which applies to this call. Additionally, our future performance may differ due to a number of factors. Many of these factors are listed in our most recent annual report on Form 10-K. And is revised and updated on our quarterly reports on Form 10-Q, and current reports on Form 8-K, which you can also find on our website at sealedair.com or on the SEC's website at sec.gov. We also discuss financial measures that do not conform to U.S. GAAP. You will find important information on our use of these measures and their reconciliation to U.S. GAAP in our earnings release. Including the appendix of today's presentation, you will find U.S. GAAP financial results that corresponds to the non-U.S. GAAP measures we referenced throughout the presentation. I will now turn the call over to Ted. Operator, please turn to Slide 3. Ted.

Thank you, Lori. And thank you for joining our Third Quarter earnings call. We appreciate your interest in SEE and hope you and your families are staying safe and healthy. We're working through very exciting and challenging times as we continue to transform SEE. You can see on Slide 3, our strategy to become a world-class, digitally driven Company, automating sustainable packaging solutions. On today's call, I'll recap our Third Quarter 2021 performance. I'll share our strategy for growth and automation, digital and sustainability within our global core markets. Chris will review our financial results and outlook in more detail. I will end with closing remarks before opening the call for Q&A. Let's turn to Slide 4, for a review of our third quarter 2021 results. Net sales increased 13% in constant dollars, with volume growth of 5% in price realization of 8%. Adjusted EBITDA increased 4%, higher volumes and pricing efforts helped mitigate inflationary pressures and supply disruptions, yet our industry-leading margins were still under pressure at 19.2% compared to 21% last year. On a per-share basis, adjusted earnings at $0.86 were up $0.04 compared to last year. We generated free cash flow of $223 million in the first nine months of the year, which compared with $292 million in the first nine months of last year. Our SEE operating engine is performing. SEE Touchless automation and sustainable packaging solutions are generating demand, growth in delivering productivity savings. I want to highlight our SEE operating model on Slide 5, which defines where we're taking SEE and what you should expect us to deliver. Our innovations in automation, digital, and sustainability continue to gain momentum and are driving our growth above our traditional packaging markets. We're targeting adjusted earnings per share growth of greater than 10% and free cash flow…

Thank you, Ted. And good morning, everyone. Let's start on Slide 9 to review our quarterly net sales growth by segment and by region. In Q3, net sales totaled $1.4 billion up 14% as reported, up 13% in constant dollars. Food was up 12% in constant dollars versus last year and protective increased 13%. The Americas and EMEA were both up double digits with America are up 14% and EMEA up 13%. APAC was up 6% versus last year. On Slide 10, you see organic sales volume and pricing trends by segment and by region. In Q3, overall volume growth was up 5% with Favorable price of 8%. Let's start with volumes. Food volumes were up 6% with growth across all regions. America is up 5%, EMEA 6%, and APAC 7%. Protective volumes were up 4% led by EMEA with 16% growth. Followed by APAC up 4% and America is essentially flat the prior year. Q3 price was favorable 8% with protective at 10% and food at 7%. Formula-based pass - throughs, primarily in food North America, are now better aligned with input costs. For the full-year 2021, we now expect to realize more than $275 million in price, given additional pricing announcements since our last call, as well as timing of formula-based pricing. As we head into 2022, we will be announcing additional price increases effective December 1st, in response to continued inflationary pressures. This increase will vary based on region and product offering and will average between 5% and 10%. We are engaging directly with our customers to meet increased demand with automation and alternative solutions that drive productivity savings. On slide 11, we present our consolidated sales and adjusted EBITDA walks. Having already discussed sales, let me comment on our Q3 adjusted EBITDA performance of $271 million,…

Thanks, Chris. Let's turn to Slide 18, where we have our purpose statement, which is how we will make our vision a reality. Before we open up the call for questions, I want to thank our people for their tireless efforts to take care of our business in this difficult environment. Demonstrating our ability to grow and expand our presence globally, considering the inflationary pressures and global supply disruptions, is a true reflection of the talent we have at SEE. We are differentiating ourselves in the markets we serve with a Can do, get it done culture. We're reinventing where we're taking SEE in driving our performance to world-class. We're at the table with our customers, solving their most critical packaging challenges with automated and sustainable solutions. Our strategy is working and continues to gain momentum. We are purpose driven to create long term value for our stakeholders and making our world better than we found it. But with that, I'll now open the call for questions. Operator.

Thank you. And as a reminder, [Operator Instructions]. We ask that you please limit yourself to one question. Our first question is from George Staphos with Bank of America. Your line is open.

Hi, thanks, Operator. Hi, everyone, good morning. Thanks for all the details. I wanted to ask a question on growth, framed with some of your strategic initiatives, Ted. Within automation, I think as of the second quarter sales were up around 26% year-on-year, year-to-date. And if I'm remembering correctly, you're up approximately 20% as of the 9-month period. We recognize there's a lot of good things going on in automation. If I'm remembering the numbers correctly [Indiscernible] you're seeing the deceleration? And relatedly, within protective, you called out supply chain headwinds. It's notable that EBITDA was down in the quarter, even though you did a really good job relative to Q2 and Q1 on price costs. Can you quantify what was going on in protective relative to growth rate there? Thank you very much.

Thanks, George. And I will try to tag team that with Chris. I think we can picked up three things and maybe we'll talk about 2022, which you kind of had an inference there. So, if you look at equipment, and if I can point to our deck on the equipment slide, which is Slide 7, if you unpack what's going on with equipment, year-to-date, as you highlighted, we highlighted up over 20% in the quarter there was a little bit of -- on the actual shipments on the sales, there was some slowdown, it was less than -- it was high single-digits. But the slowdown was due to comps from last year but also supply disruptions as you're dealing with other equipment companies who're out there. I don't want to go through all those issues, but [Indiscernible] and getting the equipment installed, etc. What we're really focusing on -- and by the way, we are working with our customers on all those issues -- but what we're really focusing on, is we really transform this into an equipment Company, is what are the bookings? How are the bookings doing? The bookings are still very, very strong. And they're strong across the board. So, not worried about that, we got a lot of issues in place. And actually, again, were you using the equipment story to handle the situations with our customers because their number one issue is labor shortages. We are right there with them and solving that. Actually, when we talked about some of our thoughts in 2022, you'll see why this is what we're quite confident as momentum mobility forward. To the second part of the question, I might try to get Chris to tag team on that. And that is what's going on with the bridge, with the Protective and --

Sure. Yes. Let me highlight around protective, and you can -- you highlighted the fact that we had good growth in the quarter, but saw the margin pressure, and unfortunately are going to hear a consistent theme given the supply chain disruptions that we faced during the quarter that we continue to manage through. Good in terms of the growth for those incremental costs are impacting our margin. So those transitory impacts, higher freight costs, think about the labor challenges, etc. to get that volume out, we have experienced some headwinds. So although we felt good about the growth, the conversion, if you will, or the margin profile in protective, unfortunately were -- was negatively impacted in the quarter. And that's what you see in our results.

Operator, next question please.

Thank you. Next question is from Ghansham Panjabi with Baird. Your line is open.

Hi, good morning. Just on your comment Chris about price costs inflecting positively in September. I just want to check in to see if it's on both segments or is it just skewed towards one? And then with protective comparisons get quite a bit more difficult from a volume standpoint Q4 onwards. Obviously, there's considerable supply chain constraints, auto OEM, and just industrial markets in general. How do you sort of see that playing out? And then related to that, how does that impact your ability to deliver and it's all machines pretty nearly. just given all the constraints that Ted cited in terms of shortages, etc. on parts?

Sure. Yeah sure, Ghansham, thank you. A few questions, maybe just take the price cost spread because in my prepared remarks, we talked about that September, we did see that favorable turn. We're finally catching up as it relates to the price relative to the input cost increases that we've experienced all year. Pretty evenly split, it's not a huge number -- I just calibrated that way it's not a huge number. We're just glad to see it be positive, and pretty much reflected both on food and protected. That momentum, we expect to continue so our guide, if you will, assumes that we're going to get incremental to our sequential improvement from Q3, roughly $40 million to potentially $50 million of incremental price to be expected to be able to achieve the midpoint of our guide for full-year and then how that relates back to fourth quarter. And then maybe your specific question relative to protective. Volumes continued to be strong. I mean, I've made my comments earlier in terms of the margin profile. We're doing everything we can to be able to meet that demand heading into Q4. So, it's great to get that volume. Granted we bought -- we'd like to see better margin improvement. But at the same time, we recognize that this is a temporary kind of transitory type of challenges that we're working through and our supply chain team is doing the best they can to get product to our facilities to be able to satisfy -- satisfy that demand. So that kind of answers your delivery question in terms of being able to deliver on our customer's needs.

Operator, next question, please.

Thank you. Our next question is from Anthony Pettinari with Citi. Your line is open.

This is actually Bryan Brokmeier sitting in for Anthony. You guided to $275 million in price increases for this year, which is the same number you gave on the last call. Is the raise to organic growth guidance entirely driven by volume? And based on what you've already said publicly, how much will prices be up in 2022?

Sure, Brian. So you're right, I mean, our midpoint last quarter's call-in terms of the topline, and then as we move forward in terms of adjusting, and tightening that range specifically around 5.5 billion for the full year is driven by volume. So it's our expectation of volume, although we're hopeful to be able to achieve better than 275, as I mentioned, on recurring marks, that's hopefully what we'll see. We're counting on it, in terms of our EBITDA range guidance for the full-year. But we would expect to be, at or better than that 275. So the teams have done a nice job working that, literally partnering with our customers to make sure that demand's satisfied. Everyone recognizes the environment we're in relative to these inflationary pressures, and we're working our best with customers to be able to satisfy their demand at the same time, as we commented, help their operations from a productivity point of view.

Brian, let me just add on one thing as you were alluding to. If you go to our Slide 5 with what's happening in the fourth quarter and on price which has been a big issue for us. We've got 3 quarters. We've been chasing those input costs. So as Chris highlighted in prepared remarks, we saw it turn in September. So that's what's giving us confidence to hit that -- our fourth-quarter and really building into the momentum into 2022. So if you look at our slide on, you could see where we're giving you, this is where the model is driving. So to unpack that a little bit for you, if you look at our organic sales that's been strong this year, we're looking to that momentum to continue to be strong and actually exceed that going into next year. And then you have price on top of that, so you see some strong volumes into 2022. And then the conversion on that, on the earnings is going to be with the price now going positive in the quarter, you're going to see a pretty significant change in our profitability in the fourth quarter compared to the first-three quarters being ahead on the price. You'll see not only our operating leverage on the volume that we've consistently hitting well over that 30%, you're going to see the price coming in as well. Going into 2022, we're still going to have some supply constraints and we still [Indiscernible] we're going to have those inflationary pressure, so they're happening. It's going to be a little bit different than the [Indiscernible] because we do think that [Indiscernible] be starting to flatten but just to catch up on all the other inflationary cost. But we still think we're going to be ahead and we think our EBITDA growth percentage is going to outweigh our sales. We're going to have some margin expansion going into next year and then net flows with getting over 10% on EPS and our cash-generation. We're seeing this momentum of the fourth-quarter being led by price, taking us into a strong 2022.

Operator, next question, please?

From Larry De Maria with William Blair. Your line is open.

Thanks. Good morning. Just changing gears a little bit. Ted, you mentioned disruptive technology. Any examples, obviously, except for the automation, just around alternative to plastics and commercial wins you may be seeing there? And then secondly, on the Reinvent SEE, obviously way ahead of schedule, any updates there and how should we conceptualize that going forward into next year?

Sure. And welcome, Larry, into our stock. It's nice having an equipment guide following us. So I'll do the first part and talk about some disruptive technologies. And I'll let Chris handle the Reinvent SEE progress. So if we look at our Slide 8, I believe our Slide 8. When we talk about what we doing in sustainability, what are we doing with automation? So if you look at this picture of what we do, we have roughly a billion pounds of resin, and plus add to 250 million pounds of paper. They're going to produce 30 billion packages. That's the big picture of what we do. To your question on disruptive technology, we're bringing automation into our facilities. We're actually bringing some pretty unique operations, creating some touchless systems that are enabling us to change how we make a product. In this example that we have here on the slide, this is where we're taking in our food business, instead of taking our -- creating the bag, we fold them up into a box. We're now fully automating that and putting it into a high density role. Actually, we're finishing making the bag in our customers operations. There's one example here, this is an order that's coming in, is we're actually able to now go to a high-density role, finish making the bag in our customers operations, we're eliminating in this one example, 87,000 boxes a year [Indiscernible] dramatic carbon footprint change, dramatic environmental change but also the productivity and it's saving customers labor, which is significant, so very disruptive. And then now we're bringing our high material -- high performance materials into the system, introducing some of the digital technology, actually printing right there now in our customers facilities versus where we used to print in our plants. This is orders in process and this is where our future is going to be. And then you can see taking it all the way to the consumer in the home, bringing our digital technology so that you can see through the package, know what material it's made of, know what's going on with the protein inside. So pretty excited about making this happen. And this is -- this reality is happening as we speak, especially right now in the protein market. So to turn your Reinvent SEE question.

[Indiscernible].

Larry, let me address to your Reinvent SEE question. Given the successful program, you're right, pretty much coming up towards the end of the program in '21. I don't expect meaningful carryover into 2022, but what we're trying to at least profile out is that, this has really become the foundation of our SEE Operating Engine meaning, every year, the productivity generation of the Company to exceed inflation is the goal. We're going through our planning period right now for 2022, not to say we won't be [Indiscernible] consistent with our SEE Operating Model in terms of how you think about our performance over time. We plan on updating investors in the February time frame, when we close out '21 and provide more specific guidance relative to 2022. But I would comment there's nothing that we're seeing as a major concern heading into 2022. We're working through these transitory costs, were getting the favorability of price as we mentioned, driving productivity in our operations, feeling good about where we are in terms of the term, but there's more work to do. So there's a lot going on with the operations right now. So we're going to present -- we're going to finalize our plan coming up and we'll give more color in the February time frame and specifically talk to productivity inflation relative to 2022.

Operator, next questions, please.

Thank you. It's from Chris Parkinson with Mizuho. Your line is open.

Hi, good morning. Just cheering on for Chris. I'm just wondering if you can provide a little bit more color on kind of the volume trends that you saw in the quarter in Protective and food but specifically by region. It seems like EMEA was particularly strong, if you can just parse that out and talk about what you see into the fourth quarter and maybe a little bit into 2022, that would be helpful. Thank you.

Sure. As you can see in our supplemental slide, specifically around the growth in protective and food given our segments as well as in regions. But we're really strong performance across the board, EMEA specifically that we highlighted, given the volume growth of 10%. Just very strong. So we look at it, that's continuing. Despite the supply challenge as well as the price increases that we're introducing, being able to retain that business and look to grow it. And that's what we see, the favorability of industrial, our fulfillment has been very strong. There are some tougher cons when you compare quarter-over-quarter but the volume we're feeling really good about.

[Indiscernible] one thing, there is -- we're looking at the business, and we've mentioned protective. A piece that we feel like we're behind is actually we had great gains with our European, Middle East and Africa region on the volumes but we're little bit late on the price there. We think that's an opportunity going forward, as we look at the protective, and that's what you're seeing in the numbers. We're a little bit behind and we're anticipating a catch-up in the fourth quarter and into 2022.

Operator next question, please?

Thank you. From Josh Spector with UBS. Your line is open.

Hey, guys. Thanks for taking my question. I guess, just to dig into food volume a little bit more. If I look at your performance in the second quarter and third quarter, somewhat consistent on a 2-year stack. When I look at your fourth quarter guide, it seems to imply a bit of a slowdown. And I don't know if there's something from a reopening or mix that's impacting that or if there's something else that I'm missing or if my interpretation is wrong. So any comments there in what you're seeing in Q4 and early thought perhaps on how you're thinking about volume growth there to '22 here would be helpful? Thanks.

Hi, Josh. Just real high level. It's we're dealing in the fourth quarter, which you see in the implied guidance is it's relatively flat and we still have the persistent labor challenges etc. The opportunity there is where we see the volume coming in on the food service. So we feel that is going to overcome. But right now, you -- the guide, right now it's flat. So going though into 2022, that's where we feel confident that we get to see food service coming back, we see really the automation coming in strong into the food side, so we should have to pickup. So for right now in the fourth-quarter, flat, slightly up, but we think we have opportunities going into 2022. And getting that not only the volume, but then catching up on the price. So that's the opportunity we have for food going into 2022.

Operator, next question please.

Thank you. It's from Mark Wilde with Bank of Montreal. Your line is open.

Hi, Ted. Hi, Chris.

Hey, Mark.

Hey, Mark.

Ted, I wanted to just talk a little bit more about automation in the timing roll through as ye it. You can imagine, I guess, after COVID last Spring and all the issues in the meat-packing plants that these manufacturers are keen to reduce the amount of labor. But in practical terms, how long does it take them to work this through the budget and then the re-engineering of all of these facilities. So how long could this reconfiguration and increased automation trend, how long could it take for this to play out in your view? And what would be the kind of the cadencing?

Great, great question, Mark. Obviously, you're asking the question with knowledge there because it depends. The big systems are probably a 2 to 3 year timing. What we're excited about we've been working on this for a while, so actually in the quarter, we were able to secure some longer term major automation wins in the protein space. Those will be building up over the cadence of the next 1 to 2 years and we'll see that. Now the rest of the portfolio, and that's where we gave you a little bit of a detail on the -- our automation slide where we wanted to unpack AUTOBAG. And actually show you what's going on with AUTOBAG is we looked at our acquisition of automated packaging systems. Because we're now looking like an equipment Company, we are tracking bookings. And we actually gave a signal to the team, actually not within the signal, it's a direct command over 9 months ago, we're going to have to double our capacity. And this is with AUTOBAG. So just unpacking that, reduced some food and with the AUTOBAG as well. So, which I'm pleased to see that we are -- we are catching up, we are behind because the book-to-bill is higher than we would like. Our lead times are longer than we'd like. But we're seeing that -- we even went public with our CapEx announcement there, over $30 million. We are catching up, and again, going into 2022, we think this will be able to support that significantly strong growth rate that we have for equipment. So I think we're well on our way to exceed the target, to get over that $750 million over the next 3 years -- 5 years -- 4 years, whatever it is but it does -- you are right but these long-term projects, which actually is exciting because we're embedded with our customers, we're working with their layouts. How do we get our equipment in place and actually embed it into those systems? Long answer simple, the big stuff, the big systems, the multi-million-dollar systems, are probably 2 to 3 years in planning and execution. But the AUTOBAG systems, those are a matter of less than 3 months and they should be in weeks and that's what we're working on.

Operator, next question, please.

Thank you. From Mike Roxland with Truist Securities. Your line is open.

Thanks. Good morning, Ted, Chris, Lori. Appreciate you taking my questions. Just wanted to follow up on the machinery and automation bookings. Obviously, this has been stressed a lot during the call. As the labor shortage continues to persist, and I would argue has gotten worse over the last few months, what has been the cadence in your machinery booking? Have you seen an acceleration in those sales bookings corresponding to the deteriorating labor situation? And then relatedly, you mentioned the machinery sales have been impacted by a shortage of materials. Can you just provide some more color around, what some of the gaining factors are there that worsened in during the quarter? And what are you seeing regarding that shortage does for in Q4? Thank you.

Okay. Good. So again, if we take a look at that slide, we talked about the equipment business and in cadence. You can hear us using languages -- as an ex equipment guy myself, you're going to hear us using language like choppy. Because these are bigger numbers that are coming in and they come in at different times. So as our pipeline grows, we'll have a smoothing of this, but in the quarter, some of the issues that I mentioned already is for getting some of those equipment installs on a sales basis. In the quarter, we had some starts and stops, so we think we'll have some recovery in that, in the fourth quarter, but still very strong. The bookings though, are up significantly. So could the bookings even be higher? Probably. That's why we got to add capacity because those lead times are stretching. So the -- to the cadence into where you asked the question about labor, right now, this is the hottest thing out there in the market today. Can we help our customers with their labor shortages? And automation is the answer. Lots of investment going on in place for working with our customers, taking care of this supply shortages. But I want to separate one thing that you said just to understand why we're so excited about our equipment strategy. Equipment is one piece, the pull-through of the materials is the other aspect of this. So not only had we in AUTOBAG specifically, we've had to invest into the material side of that as well. Our materials are up because the pull-through we're actually going to be selling materials faster. The last piece on the equipment, is we mentioned Equipment Plus Systems. These large systems that were selling [Indiscernible] have the equipment, some traditional equipment we've had in the past, some new equipment but also its full systems. We're putting in robotics, we're putting in conveyance systems, we're putting in WMS systems with our customers, so the dollar amount is much higher. And we're making the margin -- is on the savings of the full system. It's much different that we've done in the past. And we're going to be giving better and better visibility on how we measure this and how we forecast it going forward. Okay.

Operator, next question please.

Thank you. It's from Philip Ng with Jefferies. Your line is open.

Hey, guys. Ted congrats on a good quarter in a choppy environment. Yeah. UPS and the container-board manufacturers actually called out a strong underlying demand, but their customers have been constrained by supply chain labor. And it sounds like you're seeing some of that. So just curious as you head into the holiday shopping season, what are your customers signaling to you? Particularly in Protective as you lapse on these tougher comps. And when we look out to perhaps 2022, how are you thinking about volumes in that mixed dynamic evolving next year?

I'll do the first part and Chris, if you want to add.

Sure. I'll provide the 2022 color.

Yeah. So as far as where is that going, and obviously you mentioned UPS, we're a tight partner with UPS. They have our stuff actually in their innovation center. So as those at home purchases continue and going through the holiday season, we think we'll see more of the equipment for the automation, but that's already planning for 2022. What we're going to see in the next few months, is more of what we already have in place coming through with more of our discrete mailers, discrete products. So right now, it's more on the material issues to getting those taken care of, on those bottlenecks. As far as going into next year, it's going to be our new stuff that's going to help us with comps this year. Can we get those new products out there? Can we get the its automation out there? And can we also get some of our geographic issues taken care of? We're investing in our geographies around the world. So to handle that comp for next year, which we still feel pretty good about. Let Chris talk a little bit about 2022. We think we can maintain those volumes and the incremental volumes on the protective side as well.

Sure. Maybe before I talk about 2022, just to add to Ted's comments relative to maybe the third quarter as well as the fourth quarter given supply disruptions, think about labor challenges, etc. It seems when we assessed it for Q3, we felt we were kind of roughly $20 million of opportunity lost, if you will, as related to these disruptions in Q3. As that same specific question relative to Q4, little bit less but still kind of in this, call it $15 million range. So we're -- there were tens of millions of dollars unfortunately being -- not necessarily lost, some of it is going to move to the right, but it's definitely impacting our performance, even though our performance is very good. So kind of working through this supply challenges. If we turn to just 2022, just to give some high-level thoughts. The volume -- the operating model that we're driving to this 3% to 5% given the favorable dynamic, we expect to see on price cost spread, we would -- we would expect to have that organic growth between that 3% to 5% category. But then you add on top of that what we would expect in terms of price being greater than the material inflation or against price benefit of that. We're more into 6% to 7% growth as we see it right now for 2022. Now going through the planning period, this assumes has a lot of assumptions for material availability working through these transitory items, which we're working through. But we feel good about the volumes, underlying volume is there. Getting labor in place, getting through these disruptions and continue to execute is where we're focused.

Operator, next question, please?

Thank you. It's from Salvator Tiano with Seaport Research.

Hi, thanks for taking my questions. A couple of things, firstly, just building on what you just mentioned about next year organic sales being a little bit higher than normal because of price costs. Does this mean also we should assume that [Indiscernible] bag growth should be at the top end of the 5% to 7% growth rate next year or even above it? And also just briefly on capital location, you have $300 million in cash and free cash flow coming through into [Indiscernible] based on the full-year guidance, what are your thoughts now that we saw you slowed down buybacks with regards to M&A or we're starting to back -- or going back to [Indiscernible] even more?

Sure, Salvator. Thanks for your question. So negative EBITDA performance for the full-year given our updated guidance for 2021 and then as we think about 2022, early stages, really just focused on the EBITDA margin expansion. The fact that we expect to be favorable on that price costs spread heading into 2022, given the volume growth and we're converting -- today, we're converting incremental volumes close to 40%. So having that good momentum makes us feel good about it, however, a lot of assumptions built into what I just said, and we're working through to make sure we have a good profile. But I can tell you that internally how we're driving is to convert that incremental volume at greater than 30%, you've heard us say that in the past. And margin expansion, maybe a little bit challenging but we're driving roughly a 21% EBITDA margin businesses, is what we're targeting in terms of our thoughts. Then you mentioned the second item; just relative to the cash generation that we have expected for the full year. As we commented, small number, we had an incremental share repurchase in the quarter, so the amount of -- I'll call it dry powder we have to deploy in the business. And I'll let Ted comment as well because we just put out a press release this morning since we've finalized it on the [Indiscernible] divestiture, which we expect to get, roughly after-tax proceeds between $40 and $50 million for that. So for the cash proceeds to use to redeploy into the business will be available to us. And as we execute on that share repurchases and item, as we know, we recently increased the dividend. We're very optimistic that the pipeline of opportunities for M&A will be there. Of course that takes the other side to agree so we'll work through it. But maybe, Ted, some color on in the capital allocation in the excess cash we'll have.

Yeah, so just this specifically and that press release just did hit on a reflective business. And that's what we we're communicating, always trying to be transparent, if you go to our capital allocation slide 16, where again, purpose-driven and if you look in the section, we talk about invest and acquire. There's an implied word, invest, acquire, and divest to accelerate growth. As we look at our product portfolio, we're continuously analyzing our portfolio. Where does it match? And can we use our portfolio to actually fuel our growth? So, just the reflective is a nice business. It focuses though on HVAC and construction. not something that is connected to our strategy, but a very nice business, so the buyers getting a nice business. And we're going to take those proceeds and continue invest to where we're taking the business and driving into our automation, digital and sustainability growth plans. So the other piece in here is we look at our capital allocation, as Chris talked to, we're being very opportunistic. We talked about the share repurchase. I've mentioned before, our stocks hit a new low, so we're also communicating those investors that are coming in. And this model is generating close to $2 billion to cash over the next 3 years. So being purpose driven, where we put that cash is going to be how do we fuel this growth going forward. Good question and want to -- just to the employees that are going to reflective, we really appreciate what you did. And to the buyer, you got a great business, and it's all part of optimizing our portfolio.

Operator, we have time for 1 last question, please?

Excellent. And my last question is from Adam Samuelson with Goldman Sachs. Your line is open.

Yes, thank you. Good morning, everyone.

Good morning.

Morning, I was hoping maybe touch on this a little bit but as we're thinking about '22, you expressed a good level of confidence on the volume side, maybe at a global basis. But can we maybe just think about where things are -- where the confidence level is particularly high and maybe some of those end markets that are even been more challenged or a bit more of a caution area? On the positive side, I would think about e-commerce in the U.S. maybe an inversely, red meat in Brazil or in Australia, Industrial Production based protective businesses in Europe? I'm just trying to think about where -- that is the high and low end of the spectrum you're most in a little more watchful on the volume outlook?

Okay. I'll do the first part. Yes, it's good question. And again, as we're looking to grow the business, how do we grow it by product? How do we grow by geography, and how do we grow it by market? So just did some quick thoughts and then some -- the secular trends that we're focused on, which have always going back to, it's this first thing is automation and that applies to the whole portfolio because what it's being driven in these labor shortages. As we package us again, our 30 billion packages that we do a year that we're covering all markets, this labor challenge is ubiquitous, it's everywhere. Now going into some of the markets or the geographies that we think we have this year, maybe we're a little behind on. We think we have some potential, is we're pretty bullish on what's going to happen with the turnaround with the European, Middle East and Africa. Had a tough catch-up on the costs going up fast in the price, we think we're going to get that. We have some really interesting innovations that are going in to the European market, especially on that other challenge of sustainability, introducing some paper products into e-commerce. We do very well with our bubble wrap, our pillows, etc. And we're investing in some pretty interesting technology on the paper side for -- that's going to show up in the e-commerce. Being really pulled quickly into the European markets, but that's going to be global. So we see that's exciting for 2022 growth. On the food side, we see our expansion beyond proteins. Obviously fresh red meat, where we do really well. But the growth and that 22% part of our portfolio is going to be on the automation. We're really excited…

Operator, we're ready to close out the call. Thank you.

Thank you, everyone, for joining us and for participating. And you may now disconnect. Have a wonderful day.