Slide 1: O-I Earnings Presentation Full Year and Fourth Quarter 2012
O-I Earnings Presentation Full Year and Fourth Quarter 2012
Slide 2: Introduction, Agenda, Regulation G and Forward Looking Statements
1 Introduction Agenda Business discussion Financial review Outlook Concluding remarks and Q&A Presenters Regulation G The information presented above regarding adjusted net earnings relates to net earnings attributable to the Company exclusive of items management considers not representative of ongo
Slide 3: 2012 Results: Business discussion
2 2012 Results Business discussion 4Q12 Adjusted EPS was $0.40/sh Price/mix up >5% YoY Shipments down 7% YoY, driven by Europe Strong free cash flow generation Full Year 2012 Adjusted EPS was $2.64/sh, up nearly 9% from 2011 Price/mix up >4% YoY, exceeded cost inflation Shipments down 5% YoY Fx head
Slide 4: European Segment Review
European Segment Review Business discussion 3 2012 Year in Review Persistently sluggish macroeconomic conditions Higher pricing to recover cost inflation Shipments down ~9% for FY12 reflecting market conditions and share shift to smaller competitors Fx headwinds dampen FY12 results $220M impact on s
Slide 5: North America Segment Review
North America Segment Review Business discussion 4 ($M) 2012 Year in Review Stable economic conditions and demand Shipment levels consistent with prior year Price outpaced cost inflation Significantly improved manufacturing and supply chain performance, as well as successful cost reduction initiativ
Slide 6: South American Segment Review
South American Segment Review Business discussion 5 ($M) Fx neutral1 2011 2012 ($M) Fx neutral1 2011 2012 2012 Year in Review Shipments up nearly 6%, benefiting from favorable socioeconomic trends Fx headwinds dampen FY12 results $100M impact on sales $14M impact to segment profit New furnace in Bra
Slide 7: Asia Pacific Segment Review
Asia Pacific Segment Review Business discussion 6 2012 Year in Review Sluggish market conditions in AU/NZ Slower market growth in China Solid progress on Australian restructuring and other cost savings initiatives improves operating profit 2013 Business Trends Challenging market demand continues in
Slide 8: 4Q12 Recap: Quarter Results
7 1 Reportable segment sales exclude $7 million and $32 million in 4Q12 and 4Q11, respectively, principally for the Company’s global equipment sales business. 2 Contractual cost-pass through provision primarily relates to North American energy costs. 3 Primarily relates to unabsorbed fixed costs res
Slide 9: Balance Sheet, Cash Flow and Capital Structure
8 Balance Sheet, Cash Flow and Capital Structure Financial review 1 Total debt less cash divided by bank credit agreement EBITDA. See appendix for EBITDA reconciliations. Current bank covenants allow for a maximum ratio of 4.0x. 2 Free cash flow is defined as cash provided by continuing operating ac
Slide 10: Legacy Liabilities
9 Legacy Liabilities Asbestos Payments $M Asbestos Payments continue to decline in 2012, down $5M from prior year Payments in FY13 expected to be ~$155M 4Q12 asbestos charge of $155M, down 6% from 4Q11 $M Pension $125M discretionary payments in 2012 Payments in FY13 expected to be ~$75M Expense in F
Slide 11: 2013 Outlook: Higher Earnings and Free Cash Flow Year-over-Year
2013 Outlook: Higher Earnings and Free Cash Flow Year-over-Year 2013 Outlook Comments1 Price/Inflation Spread Broad-based price / product mix improvement expected to offset cost inflation of $150-$175 Sales Volume Volume: ~1% Growth in South America moderated by EU and AP Other Mfg and Delivery Cost
Slide 12: 1Q13 Business Outlook
1Q13 Business Outlook 1Q13 vs 1Q12 Comments Operational Europe Volume down mid-single digits (tough PY comp – Olympics, etc.) Smoother production than FY12: lower fixed cost absorption Price increases covering inflation North America Sales volumes down slightly (tough comp – warm 1Q12 weather) Highe
Slide 13: Concluding Remarks and Q&A
12 Concluding Remarks and Q&A Good progress in 2012 Higher segment operating profit, despite difficult conditions in Europe Delivered strong free cash flow Fully implemented capital allocation priorities: primarily debt reduction, with $27M allocated toward share repurchases Higher expectations for
Slide 14: Appendix
Appendix
Slide 15: Reconciliation of GAAP to Non-GAAP Items
14 Reconciliation of GAAP to Non-GAAP Items 1) This reconciling item is related to the difference between the calculation of earnings per share for reported net earnings and adjusted net earnings. For reported net earnings, for the three months ending December 31, 2012 and for the three months and f
Slide 16: Full Year 2012 Financial review
15 Full Year 2012 Financial review 1 Reportable segment sales exclude $37 million and $92 million in FY12 and FY11, respectively, principally for the Company’s global equipment sales business. 2 Contractual cost-pass through provision primarily relates to North American energy costs. FY12 Recap Adju
Slide 17: Free Cash Flow
16 Free Cash Flow (1) Free Cash Flow equals cash provided by continuing operating activities less additions to property, plant and equipment. $ Millions Three months ended December 31 Twelve months ended December 31 2012 2011 2012 2011 Net earnings (loss) $(141) $(766) $218 $(480) Less: Loss (earnin
Slide 18: Reconciliation of Credit Agreement EBITDA
Reconciliation of Credit Agreement EBITDA 17 $ Millions 2012 2011 Earnings (loss) from continuing operations 220 $ (481) $ Interest expense 248 314 Provision for income taxes 108 85 Depreciation 378 405 Amortization of intangibles 34 17 EBITDA 988 340 Adjustments in accordance with the Company's ban