O-i Glass, Inc. · NYSE:OI
O-i Glass — Q3 2020 Earnings Presentation
20 slides from O-i Glass's earnings presentation, Oct 28, 2020
Slide 1: 3Q 2020 Earnings
3Q 2020 Earnings October 28, 2020
Slide 2: Safe Harbor Comments
SAFE HARBOR COMMENTS Forward-Looking Statements This presentation contains “forward-looking” statements related to O-I Glass, Inc. (“O-I Glass” or the “company”) within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Section 27A of the Securitie
Slide 3: Overview
OVERVIEW Strong rebound after a challenging second quarter due to the pandemic ● aEPS1 was $0.41 and FCF2 was $205M Recovery reflects solid demand for safe and sustainable glass packaging ● 3Q20 shipments up 1.7% adjusted for ANZ sale ● Strong preference for glass as the healthy, premium and preferr
Slide 4: Shipments Stabilize Across All Geographies
SHIPMENTS STABILIZE ACROSS ALL GEOGRAPHIE S O-I Shipment Trends (vs PY) Retail/Off Premise Consumer Consumption Trends (vs PY) 10% 40% 30% 0% 20% -10% 10% 0% -20% O-I AM -10% U.S. Beer U.S. Wine U.S. Spirits EU -30% U.S. Food Europe Alcohol Europe Food -20% Jan Feb Mar Apr May Jun Jul Aug Sept Jan F
Slide 5: Executing O-I Glass Value Creation Thesis
EXECUTING O-I GLASS VALUE CREATION THESIS B O L D S T R U C T U R A L A C T I O N S T O C H A N G E O - I ’ S B U S I N E S S F U N D A M E N TA L S 1 2 3 TURNAROUND REVOLUTIONIZE OPTIMIZE INITIATIVES GLASS STRUCTURE STRONG OPERATING PERFORMANCE C R E AT E A N E W B U S I N E S S M O D E L REBALANCE
Slide 6: Glass Is the Heart of Sustainable Packaging
GLASS IS THE HEART OF SUSTAINABLE PACKAGING Further Elevating our ESG Ambitions: ● Appointed new Chief Sustainability Officer reporting directly to CEO ● Expanded breadth of our sustainability initiatives ● Activated glass advocacy campaign to reposition attributes compared to alternative substrates
Slide 7: 3Q20 Results
3Q20 RESULTS 3Q20 aEPS: $0.41 | 3Q20 SEGMENT PROFIT1: $204M 3Q20 aEPS was $0.41 compared to $0.54 in PY SEGMENT OPERATING PROFIT1 ($M) aEPS ● Segment operating profit1 nearly flat with PY ● Lower earnings mostly due to higher retained corporate costs and elevated tax rate 3Q19 AS REPORTED $206 $0.54
Slide 8: 3Q20 Segment Review
3Q20 SEGMENT REVIEW AMERICAS EUROPE ASIA PACIFIC1 SEGMENT SEGMENT SEGMENT OPERATING OPERATING OPERATING ($M) PROFIT COMMENTS PROFIT COMMENTS PROFIT COMMENTS 3Q19 $123 $79 $4 FX translation (1) 4 --- Temporary items --- (2) ▼ 2019 energy certificates --- Divestitures --- --- (5) ▼ ANZ sale SUBTOTAL $
Slide 9: 2020 Capital Allocation
2020 CAPITAL ALLOCATION CAPITAL ALLOCATION GUIDING PRINCIPLES YTD FCF1 AND NET DEBT2 FAVORABLE TO PY GUIDING PRINCIPLE PROGRESS 800 FCF Progression 561 Maximize Free Cash Flow1 400 112 205 316 ●Strong free cash flow ●3Q20 FCF $205M; $96M fav vs PY (AR factoring neutral) 0 ($M) ●YTD FCF fav vs PY (17
Slide 10: Improving Business Outlook
IMPROVING BUSINESS OUTLOOK 2020 GUIDANCE 2021 PRELIMINARY THOUGHTS 4Q20 aEPS expected to be ~ $0.30 - $0.35 Adjusted earnings improvement vs 2020 ▲ Sales Volume: Flat to slightly favorable compared to PY ▲ Sales Volume: Partial or full return to 2019 levels; higher JV earnings ▲ Production Volume: F
Slide 11: Conclusion
CONCLUSIO N Strong rebound after a challenging second quarter ● Improved operating performance ● Stronger, leaner O-I emerging from pandemic Strong demand for safe and sustainable glass packaging Improving business outlook Bold actions to create long-term value Advancing MAGMA and raising sustainabi
Slide 12: Financial Appendix
FINANCIAL APPENDIX
Slide 13: Historic Financials (Excluding ANZ)
H IS TOR IC F IN A N C IA L S ( E X C L U D I N G A N Z ) $ millions Consolidated O-I Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 Q3 2020 (1) On July 31, 2020, the Company completed the Net Sales $ 1,638 $ 1,756 $ 1,670 $ 1,628 $ 6,691 $ 1,561 $ 1,418 $ 1,616 sale of its Australia and Ne
Slide 14: FX Impact on Earnings
FX I M PACT O N EARNI NG S APPROXIMATE ANNUAL TRANSLATION FX RATES AT KEY POINTS IMPACT ON EPS FROM 10% FX CHANGE OCT 26, AVG AVG 2020 2019 3Q19 EUR $0.09 EUR 1.18 1.12 1.12 MXN $0.01 MXN 20.97 19.32 19.26 BRL $0.02 BRL 5.62 3.95 3.91 COP $0.01 COP 3,815 3,299 3,270 14
Slide 15: Non-GAAP Financial Measures
NO N- G AAP FI NANCI AL M EASUR E S The company uses certain non-GAAP financial measures, which are measures of its historical or future financial performance that are not calculated and presented in accordance with GAAP, within the meaning of applicable SEC rules. Management believes that its prese
Slide 16: Reconciliation for Adjusted Earnings
RECO NCI LI AT I O N FO R ADJUSTED EARNI NG S Three months ended Nine months ended Unaudited September 30 September 30 2020 2019 2020 2019 Earnings (loss) from continuing operations attributable to the Company $ 328 $ (575) $ 278 $ (429) Items impacting cost of goods sold: Acquisition-related fair v
Slide 17: Reconciliation to Earnings from Continuing Operations Before Income Taxes
RECONCILIATIO N TO EARNING S FROM CONTINUING OPERATIO NS BEFORE INCOME TAXES Three months ended Nine months ended Unaudited September 30 September 30 2020 2019 2020 2019 Net sales: Americas $ 887 $ 918 $ 2,442 $ 2,733 Europe 644 588 1,775 1,834 Asia Pacific 52 128 281 382 Reportable segment totals 1
Slide 18: 3Q Price, Volume and Currency Impact on Reportable Segment Sales
3Q PRI CE, VO LUM E AND CURRENCY I M PACT O N REPO RTABL E SEG M ENT SALES Three months ended September 30, Americas Europe Asia Pacific1 Total Net sales for reportable segments- 2019 $ 918 $ 588 $ 128 $ 1,634 Effects of changing foreign currency rates2 (51) 40 (11) Price (1) 13 12 Sales volume & mi
Slide 19: Reconciliation for Quarterly Free Cash Flow
RECO NCI LI AT I O N FO R Q UARTERLY FREE CASH FLO W Unaudited Three Months Ended September 30, June 30, March 31, March 31, June 30, September 30, December 2020 2020 2020 2019 2019 2019 31, 2019 Cash provided by (utilized in) continuing operating activities $ 262 $ 181 $ (315) $ (595) $ (67) $ 416
Slide 20: Reconciliation for Adjusted Effective Tax Rate
RECO NCI LI AT I O N FO R ADJUSTED EFFECT I V E TAX RATE Unaudited Three Months Ended Three Months Ended September 30, 2020 September 30, 2019 Earnings (loss) from continuing operations before income taxes (A) $ 376 $ (536) Items management considers not representative of ongoing operations (262) 66