O-i Glass, Inc. · NYSE:OI
O-i Glass — Owens Illinois — Q3 2015 Earnings Presentation
17 slides from O-i Glass's earnings presentation, Oct 27, 2015
Slide 1: Safe harbor comments
Safe harbor comments Regulation G The information presented here regarding adjusted net earnings and adjusted EPS relates to net earnings from continuing operations attributable to the Company exclusive of items management considers not representative of ongoing operations and does not conform to U.
Slide 2: Third quarter 2015 summary
Adjusted EPS of $0.57 compared to ~$0.55 guidance Below 3Q14 in constant currency due to tax timing issues related to the acquisition Shipments up 4%; flat excluding acquisition Segment profit declined $9M in constant currency Stronger U.S. dollar reduced results by $40M Favorable corporate items of
Slide 3: Europe
Europe 1 Prior year translated at 3Q15 exchange rates 3Q14 Underlying operating performance in line with expectations Industry and macro environment Weaker Euro impacts translation to USD Same price environment as in 2Q Stable industry demand 3Q review Shipments up 2%, due to beer Carryover price pr
Slide 4: North America
North America 1 Prior year translated at 3Q15 exchange rates 3Q14 Stage set for high single digit gain in 2015 operating profit Industry and macro environment Continuing sales volume shift to craft beer, wine, spirits, premium food and non-alcoholic beverages Modest declines in megabeer demand Well-
Slide 5: Latin America
Latin America 1 Prior year translated at 3Q15 exchange rates 3Q14 Solid performance in light of challenging market conditions Industry and macro environment Weaker currencies impact translation Ongoing macro challenges in Brazil 3Q review Legacy business in line with expectations Brazil shipments de
Slide 6: Asia Pacific
Asia Pacific 1 Prior year translated at 3Q15 exchange rates 3Q14 Improving operational performance more than offsets FX headwinds Industry and macro environment Weaker currencies impact translation and improve competitive positioning Australian wine exports improving In beer, consumer preference for
Slide 7: 3Q15 Adjusted EPS bridge
3Q15 Adjusted EPS bridge Delta to PY driven by currency, interest expense and tax rate 8 Adjusted Earnings Per Share 3Q14 Adjusted EPS $0.75 Currency (0.15) 3Q14 at constant currency1 0.60 Segment operating profit (0.04) Retained corporate costs 0.04 Net interest expense (0.02) Effective tax rate (0
Slide 8: Guidance update
Guidance update Full year adjusted EPS of ~$2.00 and FCF of ~$200 million 9 4Q14 Adjusted EPS $0.46 Currency Impact ($0.15) Assumptions:1 EUR = 1.13; BRL = 4.06; COP = 3,109; AUD = 0.70; MXN = 17.0 4Q14 Adjusted EPS – Constant Currency $0.31 Europe Carryover pricing pressure; higher production volum
Slide 9: Capital structure review
Capital structure review Deleveraging a key priority 10 Debt for acquisition $2.25B of long-term borrowings ~4.2% blended interest rate Managing debt structure Repaid remaining $300M of 7.375% senior notes due in 2016 Capital allocation priorities Share repurchase of $100M in 2015 Focus on deleverag
Slide 10: Acquired Vitro food & beverage
Acquired Vitro food & beverage Shifting focus to value capture 11 Solid financial results for September 2015 Business stability maintained during transition Integration progressing well Clear value-added transaction Expected EPS accretion of ~$0.30 in 2016 and ~$0.50 in 2018 Expected FCF contributio
Slide 11: A look ahead
A look ahead Already addressing opportunities to create shareholder value 12 Identifying clear value-generating opportunities Stabilize revenue and end-to-end supply chain Elevate and sustain performance Capture value in O-I Mexico and in JV with CBI Building a performance-focused culture Align and
Slide 12: A look ahead
OC! A look ahead GLASS Already addressing opportunities to create shareholder value = Identifying clear value-generating opportunities + Stabilize revenue and end-to-end supply chain + Elevate and sustain performance * Capture value in O-| Mexico and in JV with CBI * Building a performance-focused c
Slide 13: Price, volume and currency impact on reportable segment sales
Price, volume and currency impact on reportable segment sales 14 1 Reportable segment sales exclude the Company’s global equipment business $ Millions Europe North America Latin America Asia Pacific Total1 3Q14 Segment Sales $709 $517 $313 $197 $1,736 Currency (102) (7) (95) (39) (243) 3Q14 at const
Slide 14: Reconciliation to adjusted earnings and constant currency
Reconciliation to adjusted earnings and constant currency 15 (1) Currency effect on earnings determined by using month-end foreign currency exchange rates in the three and nine month periods ended September 30, 2015, to translate the local currency results for the same periods in 2014. The reconcili
Slide 15: Reconciliation of segment operating profit
Reconciliation of segment operating profit 16 Note: Reportable segment data excludes the Company’s global equipment business 1 Prior year translated at 3Q15 exchange rates $ Millions 3Q14 Segment Operating Profit $248 Currency (40) 3Q14 at constant currency1 208 Price 6 Sales volume (3) Operating co
Slide 16: Estimated impact from currency rate changes
Estimated impact from currency rate changes 17 Translation impact on EPS from a 10% change compared with the U.S. dollar EU (primarily Euro): ~$0.10 LA (primarily Brazilian Real and Colombian Peso): ~$0.09 AP (primarily Australian Dollar and New Zealand Dollar): ~$0.05
Slide 17: Estimated impact from currency rate changes
Estimated impact from currency rate SF cs changes fe Translation impact on EPS from a 10% change compared with the U.S. dollar = EU (primarily Euro): ~$0.10 * LA (primarily Brazilian Real and Colombian Peso): ~$0.09 = AP (primarily Australian Dollar and New Zealand Dollar): ~$0.05