O-i Glass, Inc. · NYSE:OI
O-i Glass — Q4 2021 Earnings Presentation
28 slides from O-i Glass's earnings presentation, Feb 1, 2022
Slide 1: Full Year and Fourth Quarter 2021 Earnings
FULL YEAR AND FOURTH QUARTER 2021 EARNINGS FEBRUARY 1, 2022
Slide 2: Safe Harbor Comments
SAFE HARBOR COMMENTS FORWARD-LOOKING STATEMENTS This presentation contains “forward-looking” statements related to O-I Glass, Inc. (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 Securities Act of 1933,
Slide 3: Strong 2021 Results
OV E RV I EW BROAD BASED RECOVERY Strong 2021 Results FOLLOWING THE ONSET OF THE PANDEMIC CONSISTENTLY DELIVERING ON COMMITMENTS (FY21 VS FY20) • $1.83 FY21 aEPS1 exceeded original guidance of $1.55-$1.75 and recent outlook of $1.77-$1.82 ▲ 9.9% Net Sales Increase3 • $282M FY21 FCF2 favorable to ori
Slide 4: Shipments Exceeded Pre-pandemic Levels
S AL E S VO L UM E T R E N DS Shipments Exceeded Pre-pandemic Levels SALES VOLUME GROWTH (IN TONS, ADJUSTED FOR DIVESTITURES) 8% FY21: +5.3%1 SHIPMENTS EXCEEDED PRE-PANDEMIC LEVELS 6.2% 6% 5.3% • Sales volume up 1.1%1 vs 2019 5 Year CAGR • Key categories solidly higher including Beer, Wine, NAB, and
Slide 5: Advancing Bold Plan to Change Business Fundamentals
2 0 2 1 S T R AT E GIC P R I ORIT IE S Advancing Bold Plan to Change Business Fundamentals 2021 PRIORITIES 2021 HIGHLIGHTS ❶ MARGIN EXPANSION – STRONG OPERATING PERFORMANCE AND COST EFFICIENCIES $50M initiative benefits $70M benefits which exceeded original goal of $50M Improve performance in North
Slide 6: Accelerating O-I's Transformation
2022 KEY OBJECTIVES Accelerating O-I’s Transformation HORIZON 1 PRIORITIES (2022-2024) 2022 KEY OBJECTIVES MARGIN EXPANSION Higher selling prices offset PY unfav Net Price and 2022 inflation ≥ $50M margin expansion initiative benefits PROFITABLE GROWTH Substantially complete Colombia and Canad
Slide 7: Strong Recovery from the Onset of the Pandemic
F Y 2 1 E AR N I N GS R E V I E W Strong Recovery from the Onset of the Pandemic FY21: $827M Seg Oper Profit and $1.83 aEPS 4Q21: $177M Seg Oper Profit and $0.36 aEPS • Pandemic recovery: sales shipments +5.3%6, production +7.3%6 • Strong demand as shipments +5.4%6, production +1.2%6 • Higher sellin
Slide 8: Strong Sales Growth and Cost Performance in Europe
4Q21 SEGMENT REVIEW Strong Sales Growth and Cost Performance in Europe AMERICAS EUROPE SEGMENT SEGMENT OPERATING OPERATING ($M) PROFIT COMMENTS PROFIT COMMENTS 4Q20 $127 $73 FX (1) (2) Divestitures — — SUBTOTAL $126 $71 ▲ Constructive price environment ▲ Constructive price environment Net price 8 •
Slide 9: Achieved All Key Goals
F Y 2 1 F I N AN CIAL P R I O RITIE S HIGHER FCF 1 AND LOWER NET DEBT 2 Achieved All Key Goals FCF 282 GUIDING PRINCIPLE 2021 ACTUAL $300 $250 Maximize FCF1 $200 146 FY21 FCF: > $260M (20-25% conversion) FCF $282M, 25% conversion $150 ($M) DSO/DPO/IDS: ~ flat or fav with PY IDS down 5 days from 2020
Slide 10: Expect Higher Earnings and Strong Adjusted FCF
F Y 2 2 BUS I N E S S O UT L O O K Expect Higher Earnings and Strong Adjusted FCF FY22 aEPS1: $1.85-$2.00 FY22 Cash Flow: ≥ $125M FCF2 and ≥ $350M aFCF3 $2.25 12% – 20% Improvement $400 Excludes $225M Strategic / Expansion ≥ 350 $350 CapEx which is funded by Portfolio Optimization Proceeds 1.85-2.00
Slide 11: Leverage Ratio
F Y 2 2 F I N AN CIAL P R I O RITIE S REDUCING FINANCIAL LEVERAGE 2 Fund Expansion, Improve Balance Sheet 6.0 2022 FINANCIAL PRINCIPLES AND OBJECTIVES 5.0 Optimize aFCF1 • Generate ≥ $350M aFCF in 2022; 25% – 30% aFCF/EBITDA conversion 4.0 High 3s Complete Portfolio Optimization Program to Fund MAGM
Slide 12: Expect Higher Earnings
1 Q 2 2 BUS I N E S S O UT L O O K Expect Higher Earnings 1Q22 EARNINGS OUTLOOK (aEPS) FAVORABLE NET PRICE 1Q21 AS REPORTED $0.35 • Sales price increases to offset elevated inflation • Continued elevated inflation – energy, raw material, labor FX1 ▼ Divestitures2 ▼ SALES VOLUME GROWTH SUBTOTAL $0.32
Slide 13: Conclusion
C O N CLUS ION • Strong 2021 performance as earnings and cash flow exceeded guidance • Excellent 2021 progress advancing O-I’s bold plan to improve business fundamentals • Good momentum entering 2022 with 4Q21 sales volume up > 5%1 and Jan 2022 up ~ 3% • Clear 2022 objectives aligned with recent Inv
Slide 14: Appendix
APPENDIX
Slide 15: ESG Progress & Update
E S G P RO G R E SS & UP DAT E INITIATIVES AND ACCOMPLISHMENTS • Doubled ESG Initiatives • Elevated Goals • Enhanced Governance • Created Global Leadership Network • Sustainability Report Published • SBTi Approved Target • Cradle-to-Cradle Certified • CEO Action for Diversity & Inclusion Signatory P
Slide 16: Paddock Chapter 11 – Progress and Update
PAD D OCK C H AP TE R 1 1 – P RO G RE S S AN D UP DAT E 1 COMPLETED/CURRENT • Phase 1: Paddock files for bankruptcy protection in Delaware and obtains initial relief • Phase II: Paddock informally negotiates with the Asbestos Claimants’ Committee and Future Claimants Representative, fiduciaries for
Slide 17: Segment FX Impact on Earnings
S E G M E N T F X I M PACT O N E AR N I N GS APPROXIMATE ANNUAL IMPACT ON FX RATES AT KEY POINTS EPS FROM 10% FX CHANGE Jan 28, Dec 31, AVG Dec 31, AVG 2022 2021 4Q21 2020 4Q20 EUR 0.13 EUR 1.12 1.13 1.14 1.23 1.20 MXN 0.04 MXN 20.75 20.46 20.85 19.89 20.44 BRL 0.04 BRL 5.42 5.57 5.61 5.19 5.43 COP
Slide 18: Non-GAAP Financial Measures
N O N - GAAP F I N AN CIAL M E AS 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
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 Three months ended Year ended Unaudited December 31 December 31 2021 2020 2021 2020 Net earnings (loss) attributable to the Company $ 43 $ (29) $ 142 $ 249 Items impacting equity earnings (losses): Restructuring, asset impairment and othe
Slide 20: Segment Reconciliations
S E G M E N T R E C O N CILIAT IONS 4Q PRICE,VOLUME AND CURRENCY IMPACT ON REPORTABLE SEGMENT SALES Three months ended December 31, Americas Europe Asia Pacific Total Net sales for reportable segments- 2020 $ 880 $ 589 $ - $ 1,469 Effects of changing foreign currency rates (a) (8) (22) (30) Price 58
Slide 21: Segment Reconciliations
S E G M E N T R E C O N CILIAT IONS DEC YTD PRICE,VOLUME AND CURRENCY IMPACT ON REPORTABLE SEGMENT SALES Year ended December 31, Americas Europe Asia Pacific Total Net sales for reportable segments- 2020 $ 3,322 $ 2,364 $ 281 $ 5,967 Effects of changing foreign currency rates (a) 22 77 99 Price 160
Slide 22: Reconciliation for Segment Operating Profit
R E C O NCILIATIO N F O R S E G M E N T O P E R AT ING P RO F IT Three months ended Year ended Unaudited December 31 December 31 2021 2020 2021 2020 Net sales: Americas $ 906 $ 880 $ 3,557 $ 3,322 Europe 647 589 2,687 2,364 Asia Pacific - 281 Reportable segment totals 1,553 1,469 6,244 5,967 Other 3
Slide 23: Reconciliations Adjusted for Divestitures
R E C O NCILIATIO NS AD J US T E D F O R D I V E S TIT URE S Year ended Unaudited December 31 2021 2020 Net sales: Americas $ 3,557 $ 3,322 Europe 2,687 2,364 Asia Pacific 281 Reportable segment totals 6,244 5,967 Other 113 124 Net sales $ 6,357 $ 6,091 Divestitures (305) Net Sales adjusted for dive
Slide 24: Reconciliation for Adjusted Effective Tax Rate
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 F F E C T I V E TA X R AT E Three Months Ended Year Ended Dec 31, 2021 Dec 31, 2021 Earnings before income taxes (A) $ 71 $ 332 Items management considers not representative of ongoing operations and other adjustments 9 120 Adjusted Earnings before
Slide 25: 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 Year Ended Year Ended Dec 31, 2021 Dec 31, 2020 Earnings from continuing operations before income taxes $ 332 $ 353 Interest expense, net (216) (265) Interest income 7 5 Earnings before interest and taxes (non GAAP) $ 55
Slide 26: Additional Reconciliations
AD D I TIO NAL R E C O NCILIATIO NS RECONCILIATION TO NET DEBT Dec 31, Dec 31, Dec 31, 2021 2020 2019 Total debt $ 4,825 $ 5,142 $ 5,559 Cash and cash equivalents 725 563 551 Net Debt $ 4,100 $ 4,579 $ 5,008 RECONCILIATION TO FREE CASH FLOW & ADJUSTED FREE CASH FLOW Year Ended December 31, Forecaste
Slide 27: Reconciliation to Financial Leverage
R E C O N C I L I AT I O N TO F I N A N C I A L L E V E R AG E $ millions 2019 2020 2021 Earnings (loss) from continuing operations $ (379) $ 264 $ 165 Interest expense (net) 311 265 $ 216 Interest income 9 5 $ 7 Provision for income taxes 118 89 $ 167 Depreciation 390 369 $ 356 Amortization of inta
Slide 28: Reconciliation to Adjusted Earnings – Q1
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 – 1 Q 2 1 Three months ended March 31, 2021 Net earnings (loss) attributable to the Company $ (97) Items impacting other expense, net: Charge related to Paddock support agreement liability 154 Charge for deconsolidation of Paddock Total a