O-i Glass, Inc. · NYSE:OI
O-i Glass — Q3 2023 Earnings Presentation
27 slides from O-i Glass's earnings presentation, Nov 1, 2023
Slide 1: Third Quarter 2023 Earnings
THIRD QUARTER 2023 EARNINGS NOVEMBER 1, 2023
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 Securiti
Slide 3: Overview: Effective Execution in a Challenging Macro Environment
OVERVIEW Effective Execution in a Challenging Macro Environment ADJUSTED EPS $1.00 3Q23 aEPS OF $0.80/SH EXCEEDED MANAGEMENT EXPECTATIONS & PY $0.80 Strong net price realization & solid operating performance amid softer than expected demand $0.80 Higher revenue, segment operating profit, margins
Slide 4: Significant Performance Improvement
SIGNIFICANT PERFORMANCE IMPROVEMENT Favorable Performance Across Key Financial Measures KEY FINANCIAL MEASURES 3Q23 3Q22 $M EXCEPT MARGINS, EPS AND RATIO +3% +16% +13% +27% +12% 1,743 +160 BPS 3.5x 0.80 1,693 365 301 17.6% 142 -0.7x 16.0% 0.63 315 2.8x 266 127 Net Sales aEBITDA Segment Segment Oper
Slide 5: Higher Top-Line and Bottom-Line Results
HIGHER TOP-LINE AND BOTTOM-LINE RESULTS Higher Net Sales and Solid Operating Performance Drive 27% aEPS Improvement NET SALES aEPS $2,500 $1.00 Further details included in the appendix Further details included in the appendix 0.80 $2,000 $0.80 1,693 1,743 0.63 $1,500 $0.60 (aEPS) ($M) $1,000 $0.40 $
Slide 6: Improved Segment Operating Profit
IMPROVED SEGMENT OPERATING PROFIT Segment Operating Profit Exceeded $300M Representing a 13% Increase from PY as Margins Improved 160 BPS AMERICAS EUROPE $250 $250 Further details included in the appendix Further details included in the appendix 24.2% $200 $200 185 20.0% 13.2% $150 12.2% $150 136 13
Slide 7: 2023 Business Outlook
2023 BUSINESS OUTLOOK aEPS Up More Than 30% From 2022 and Strongest aEPS Performance in 15 Years GUIDANCE ACTUAL 4Q23 FY23 YTD 23 CURRENT PRIOR CURRENT PRIOR Sales Volume Growth (in Tons) ▼ 11% ▼ DD ▼ LSD/MSD ▼ DD ▼ MSD/HSD Adjusted EBITDA ($M) $1,211 n/a n/a > $1,450 > $1,470 Adjusted Earnings Per
Slide 8: Market Trends
MARKET TRENDS Demand Impacted by Significant Destocking and Modestly Lower Consumption Expect Rebound Early/Mid-2024 DEMAND TRENDS YoY Change in Consumer Consumption and O-I Shipments Stronger 2H24 as Markets Rebound and SOFT YTD GLASS DEMAND O-I Comps Challenging 2023 Destocking Period Significan
Slide 9: Agility in Action
AGILITY IN ACTION STRUCTURAL APPROACH TO IMPROVED AGILITY Taking Action to Improve Performance Capital Breakthrough Structure Technology Discipline People & Portfolio Culture Optimization TEMPORARY PRODUCTION CURTAILMENT Concentrated in 4Q23 to reduce inventory heading into 2024 ESG Management Sys
Slide 10: Initial Discussion on 2024 Business Levers
INITIAL DISCUSSION ON 2024 BUSINESS LEVERS 2024 Financial Outlook To Be Provided During the Year End Earnings Call Currently expect KEY low-to-mid single digit growth Subject to Macro Factors Under O-I Control SALES VOLUME Higher net price on ~ 55% contracted business; Moderately higher interest NET
Slide 11: Compelling Strategy
COMPELLING STRATEGY Expect to Create Significant Shareholder Value SUSTAINABILITY Integrated ESG Roadmap BREAKTHROUGH INNOVATION MAGMA Creates a New PROFITABLE Paradigm for Glass GROWTH Leverage favorable long-term mega-trends AGILE EXECUTION Bold Transformation and Delivering on Commitments IMPROVE
Slide 12: Conclusion
CONCLUSION Effective Execution in a Challenging Macro Environment 3Q23 ADJUSTED EARNINGS EXCEEDED GUIDANCE AND PRIOR YEAR FY23 aEPS EXPECTED UP ~ 30% FROM 2022 AND STRONGEST RESULTS IN 15 YEARS TAKING ACTION TO DRIVE STRONG PERFORMANCE AS MARKETS RECOVER IN 2024 COMPELLING STRATEGY TO CREATE LONG-TE
Slide 13: Appendix
APPENDIX
Slide 14: Summary Financial Reconciliation: 3Q23 vs 3Q22
SUMMARY FINANCIAL RECONCILIATION: 3Q23 VS 3Q22 NET SALES SEGMENT OPERATING PROFIT $M except EPS and % AMERICAS EUROPE CORP TOTAL AMERICAS EUROPE TOTAL aEPS 3Q22 $ 987 $ 680 $ 26 $1,693 $130 $136 $266 $0.63 % Margin 13.2% 20.0% 16.0% FX 59 59 118 9 10 19 0.09 Divestitures - (1) (1) (0.02) SUBTOTAL $1
Slide 15: 2023 Key Strategic Initiative Scorecard
2023 KEY STRATEGIC INITIATIVE SCORECARD Increasing Margins, Enabling Long-Term Profitable Growth with New Disruptive Technology and Improving Capital Structure PRIORITIES 2023 OBJECTIVES 3Q23 PROGRESS MARGIN ≥ $150M net price realization (excl. margin expansion initiatives) ▲ $523M YTD net price r
Slide 16: MAGMA Greenfield Progressing Well
MAGMA GREENFIELD PROGRESSING WELL First MAGMA Greenfield in Bowling Green KY Expected to be Operational Mid-2024 MAGMA MELTER CUSTOMER ENGAGEMENT CENTER Small, Incremental Growth, Flexibility, Sustainability Customer Intimacy, Collaborative Innovation MODULAR BATCH SYSTEM NEAR-LOCATED Fast and Agile
Slide 17: Our Sustainability Goals
OUR SUSTAINABILITY GOALS 5 0 % TA R G E T S U P P LY C H A I N S U S TA I N A B I L I T Y Increase recycled content to 50% average by 2030. O-I is taking a Achieve sustainability balance, together, by aligning our supply chain tailored approach to increase recycled content rates across its with our
Slide 18: Segment FX Impact on Earnings
SEGMENT FX IMPACT ON EARNINGS APPROXIMATE ANNUAL IMPACT ON FX RATES AT KEY POINTS EPS FROM 10% FX CHANGE Oct 30, AVG AVG 2023 3Q23 3Q22 EUR 0.33 EUR 1.06 1.08 1.00 MXN 0.07 MXN 18.05 16.99 20.19 BRL 0.03 BRL 5.04 4.88 5.23 COP 0.02 COP 4,066 4,023 4,434 Current Business Outlook is Based on FX Rates
Slide 19: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES 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 presentation
Slide 20: Reconciliation to Adjusted Earnings
RECONCILIATION TO ADJUSTED EARNINGS The Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP measure, adjusted earnings and adjusted earnings per share, for the periods ending after September 30, 2023, to its most directly comparable GAAP financial measure, net
Slide 21: Segment Reconciliations
SEGMENT RECONCILIATIONS 3Q23 PRICE,VOLUME AND CURRENCY IMPACT ON REPORTABLE SEGMENT SALES 3Q23 PRICE, SALES VOLUME, OPERATING COSTS AND CURRENCY IMPACT ON REPORTABLE SEGMENT OPERATING PROFIT 21
Slide 22: Segment Reconciliations
SEGMENT RECONCILIATIONS SEPTEMBER YTD PRICE,VOLUME AND CURRENCY IMPACT ON REPORTABLE SEGMENT SALES SEPTEMBER YTD PRICE, SALES VOLUME, OPERATING COSTS AND CURRENCY IMPACT ON REPORTABLE SEGMENT OPERATING PROFIT 22
Slide 23: Reconciliation for Segment Operating Profit
RECONCILIATION FOR SEGMENT OPERATING PROFIT 23
Slide 24: Reconciliation to Total Financial Leverage
RECONCILIATION TO TOTAL FINANCIAL LEVERAGE 24
Slide 25: Reconciliation to Adjusted EBITDA
RECONCILIATION TO ADJUSTED EBITDA For the year ending December 31, 2023, the Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP measure, adjusted EBITDA, to its most directly comparable U.S. GAAP financial measure, net earnings, because management cannot relia
Slide 26: Reconciliation to FCF & Adjusted FCF
RECONCILIATION TO FCF & ADJUSTED FCF 26
Slide 27: Additional Reconciliations
ADDITIONAL RECONCILIATIONS RECONCILIATION TO SEGMENT OPERATING PROFIT MARGIN For the year ending December 31, 2023 and subsequent periods, the company is unable to present a quantitative reconciliation of its forward-looking non-GAAP measure, segment operating profit margin, to its most directly com