O-i Glass, Inc. · NYSE:OI
O-i Glass — Deutsche Bank 14th Annual Global Industrials, Materials & Building Products Conference 202 (June 2023)
23 slides from O-i Glass's conference presentation, Jun 8, 2023
Slide 1: 2Q23 Capital Markets Presentation
2Q23 CAPITAL MARKETS PRESENTATION JUNE 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: At a Glance
AT A GLANCE DIVERSE ATTRACTIVE PRODUCT PORTFOLIO CUSTOMER BASE 33% beer 21% wine 17% food 15% NAB 14% spirits 6,000+ direct customers GLASS IS THE MOST MAGMA SUSTAINABLE PACKAGE reimagines glass making to all natural, endlessly recyclable, support customer aspirations NEVER trash and enable profitab
Slide 4: Attractive Investment Opportunity
AT T RACT IV E INV EST M E NT OPPORT U NIT Y SUSTAINABILITY Glass is Set to Win in the BREAKTHROUGH New Green Economy INNOVATION MAGMA Creates a New PROFITABLE Paradigm for Glass GROWTH Strongest Glass Fundamentals in 20+ yrs AGILE EXECUTION Bold Transformation and Delivering on Commitments IMPROVE
Slide 5: Consistent Earnings and Balance Sheet Improvement
IMPROVE PERFORMANCE AND REDUCE RISK Consistent Earnings and Balance Sheet Improvement HIGHER EARNINGS LOWER FINANCIAL LEVERAGE 1 3.50 6.0 3.05-3.25 5.5 3.00 5.0 4.4 2.50 2.30 4.0 Financial Leverage 1 3.5 2.00 1.83 < 3.0 aEPS 3.0 1.50 2.5 1.22 2.0 1.00 2.5 1.0 0.50 0.00 0.0 2020 2021 2022 2023 Guidan
Slide 6: Bold Transformation and Delivering on Commitments
AG ILE EXECUT IO N INCREASE SUPPLY CHAIN EFFICIENCY BOLD TRANSFORMATION AND ENABLE A MORE FLEXIBLE, SCALABLE AND DELIVERING ON COMMITMENTS SUSTAINABLE PRODUCTION CAPABILITY INCREASE COST COMPETITIVENESS OPTIMIZE BUSINESS PORTFOLIO AND STRUCTURE BUILD A SIMPLE, AGILE AND EFFECTIVE ORGANIZATION 6
Slide 7: Solid Long-Term Fundamentals Despite Recent Softening
PROFITAB L E GROW T H Solid Long-Term Fundamentals Despite Recent Softening O-I VOLUME GROWTH PROJECTED GLASS GROWTH 2023-2026 (IN TONS, ADJUSTED FOR DIVESTITURES) (SOURCE: EUROMONITOR PER UNIT CONSUMPTION PROJECTIONS) 8% 4.0% 6.2% 6% 5.3% 3.5% 3.2% 3.2% 3.0% 4% CAGR 2023 - 2026 1.8% Expect full yea
Slide 8: Breakthrough Innovation: Creates a New Paradigm for Glass
B REAK T HRO U GH INNOVAT ION EXPAND RIGHT TO WIN WITH RAPID COLOR, SHAPE & SIZE CHANGES GROW WITH THE MARKET WITH SCALABLE CAPACITY ENTER NEW MARKETS WITH SCALABILITY & LOWER CAPITAL COST EFFICIENT WITH MORE VARIABLE COST STRUCTURE CREATES A NEW AGILE THROUGH ECONOMIC CYCLES & SEASONALITY PARADIGM
Slide 9: First MAGMA Greenfield Commissioning Mid-2024
FIRST MAGMA GREEN FI ELD COMMISSI O NING M ID-2 0 2 4 First MAGMA Greenfield in Bowling Green, KY Will be a Showcase Plant MAGMA MELTER CUSTOMER ENGAGEMENT CENTER Small, Incremental Growth, Flexibility, Sustainability Customer Intimacy, Collaborative Innovation MODULAR BATCH SYSTEM NEAR-LOCATED Fast
Slide 10: Sustainability: Solid Progress Towards Rigorous ESG Goals
SUSTAINABILITY Solid Progress Towards Rigorous ESG Goals OUR SBTi target to reduce GHG Reach 40% renewable electricity Increase recycled content COMMITMENT emissions 25% by 2030 use by 2030 and reduce total (interim target of 10% by 2025) to 50% average by 2030 energy consumption by 9% OUR 2022 Redu
Slide 11: Key Objectives: 2023 Objectives and Progress
2 0 2 3 K EY OB JECT IV E S All Key Initiatives At or Ahead of Schedule PRIORITIES 2023 OBJECTIVES 2023 PROGRESS (as of 4/25/23) MARGIN ≥ $150M net price realization (excl. margin expansion initiatives) ▲ $180M YTD net price realization ($159M excl. margin expansion initiatives) EXPANSION ≥ $100
Slide 12: Business Outlook
BUSIN E S S OUT LOOK Constructive 2023 Business Outlook and Expect Continued Improvement in 2024 MOST RECENT 2023 GUIDANCE (as of 4/25/23) SALES VOLUME ADJUSTED NET DEBT GROWTH EBITDA CASH FLOW LEVERAGE (TONS) ($M) aEPS ($M) RATIO 2Q23 ▼ LSD-MSD n/a $0.80 - $0.85 n/a n/a Affirm 2Q23 Financial Guidan
Slide 13: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES #1 #2 #3 IMPROVE FUND RETURN CAPITAL PROFITABLE VALUE TO STRUCTURE GROWTH SHAREHOLDERS ▲ < 3.0x leverage (2023) ▲ $630M expansion program (2022-2024) ▲ Anti-dilutive repurchases ▲ Glide path to ~ 2.5x leverage ▲ Continued portfolio optimization ▲ Evaluate additional rep
Slide 14: Conclusion
CONCLUSION COMPELLING INVESTMENT THESIS ▲ IMPROVING PERFORMANCE DRIVES CONSTRUCTIVE 2023 OUTLOOK ▲ CLEAR STRATEGY TO CREATE VALUE AND REDEPLOY CAPITAL ▲ DELIVERING ON KEY TRANSFORMATION INITIATIVES ▲ RESILIENCE AMID ELEVATED MACRO VOLATILITY ▲ O-I REPRESENTS AN ATTRACTIVE INVESTMENT OPPORTUNITY 14
Slide 15: Appendix
APPENDIX
Slide 16: ESG Goals and Performance
ESG GOALS AND PERFORMANCE SBTi target Reach 40% Increase all to reduce renewable Align our Make a 50% Increase aspects of Make glass GHG electricity use Reduce our supply chain improvement recycled Drive towards a Reinvent and diversity, recycling OUR emissions 25% by 2030 and global water with our
Slide 17: Segment FX Impact on Earnings
SEG M E NT FX IMPACT ON EARNING S APPROXIMATE ANNUAL IMPACT ON FX RATES AT KEY POINTS EPS FROM 10% FX CHANGE Apr 24, AVG AVG 2023 1Q23 1Q22 EUR 0.31 EUR 1.10 1.08 1.09 MXN 0.07 MXN 17.98 18.42 20.28 BRL 0.03 BRL 5.04 5.14 4.95 COP 0.01 COP 4,478 4,683 3,876 17
Slide 18: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEA S UR 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 presentat
Slide 19: Reconciliation to Adjusted Earnings
R E C O N C I L I AT I O N TO A D J U S T E D E A R N I N G S 19
Slide 20: Reconciliation to Total Financial Leverage
R E C O N C I L I AT I O N TO TOTA L F I N A N C I A L L E V E R AG E For all periods after the last twelve-months ending March 31, 2023, the Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP measure, total debt less cash plus unfunded pension liability plus
Slide 21: Reconciliation for Adjusted EBITDA Conversion
R E C O N C I L I AT I O N F O R A D J U S T E D E B I T DA C O N V E R S I O N 21
Slide 22: Reconciliation to Net Debt Leverage Ratio
ADDIT IONAL RECONCILIAT IONS RECONCILIATION TO NET DEBT LEVERAGE RATIO For the year ending December 31, 2023, the Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP measure, net debt leverage ratio, which is defined as total debt less cash divided by Adjusted
Slide 23: Reconciliation to FCF & Adjusted FCF
ADDIT IONAL RECONCILIAT IONS RECONCILIATION TO FCF & ADJUSTED FCF 23