O-i Glass, Inc. · NYSE:OI
O-i Glass — Owens Illinois — Investor Presentation (September 2016)
18 slides from O-i Glass's investor presentation, Sep 15, 2016
Slide 1: Safe harbor comments
Safe harbor comments 2 Regulation G Management believes that its presentation and use of certain non-GAAP financial measures, including adjusted EPS and free cash flow, provide relevant and useful information, which is widely used by analysts, investors and competitors in the industry, as well as by
Slide 2: Leading positions in key global markets
Leading positions in key global markets 3 #1 position in North America MATURE MARKETS #1 position in Australia and N. Zealand #1 position in Europe #1 position in Latin America EMERGING MARKETS Foothold in China Leading position within Southeast Asia
Slide 3: Trusted by the world's leading and emerging brands
4 Trusted by the world’s leading and emerging brands Strong partnerships Consolidation across the food and beverage industry requires increased efficiencies across the value chain Proliferation of new (potential) customers and brands entering the market provides great opportunity for glass Increasin
Slide 4: Why O-I? Investment thesis
Why O-I? 5 Investment thesis Global leader in glass packaging Well positioned to modestly grow volume Secular trends support glass growth Select opportunities for smarter growth Comprehensive strategic plan Positioned to increase adjusted EPS1 and free cash flow to deleverage balance sheet and drive
Slide 5: End market demand trends
End market demand trends 6 NORTH AMERICA EUROPE Well balanced supply and demand Very dynamic marketplace in beer; strength in premium and imports Supply/demand dynamics unchanged Solid export trends, given FX rate Continuing, but less intense, price dynamics LATIN AMERICA Attractive growth trends in
Slide 6: On track to deliver incremental segment operating profit of ~$50M to ~$70M
7 On track to deliver incremental segment operating profit of ~$50M to ~$70M Improved year-on-year manufacturing efficiencies at two-thirds of plants Increased asset stability through reduced unscheduled downtime Improved quality through decreased waste Established global supply chain team executing
Slide 7: 3Q16 Adjusted EPS outlook
3Q16 Adjusted EPS outlook 9 3Q15 Adjusted EPS1 $0.57 Currency Impact* ($0.03) Assumptions:2 EUR = 1.12; BRL = 3.24; COP = 2,942; AUD = 0.75; MXN = 18.8 3Q15 Adjusted EPS in Constant Currency1 $0.54 Europe* Lower production costs; sales volumes on par with PY; and on-going price/cost dynamics North A
Slide 8: Full year 2016 outlook
Full year 2016 outlook 10 Maintaining full year 2016 EPS & FCF guidance Adj. EPS1 guidance: $2.25 - $2.35 Free Cash Flow2 guidance: ~$300M Received ~$130M VAT refund in August 2016 Key factors for 2016 guidance Strong business performance in legacy and acquired businesses 2016 Target Status Full Yea
Slide 9: O-I: Disciplined allocation of strong cash flows
O-I: Disciplined allocation of strong cash flows 11 Strong cash flow generation, invested Capex JV w/ CBI NCI2 Share buybacks Net debt1 Asbestos payments $130 $20 $80 1 Primarily net debt reduction. For the Company, the change in net debt is also impacted by currency rates, investing and financing a
Slide 10: 2016 management priorities
2016 management priorities 12 Establish and maintain revenue and operational stability Improve commercial and end-to-end supply chain performance Maximize the value of the food and beverage acquisition in Mexico Leverage an enterprise approach and ensure accountability Strategic Improve margins and
Slide 11: 2016 management priorities
| 2016 management priorities «Establish and maintain revenue and operational stability = Improve commercial and end-to-end supply chain performance * Maximize the value of the food and beverage acquisition in Mexico * Leverage an enterprise approach and ensure accountability = Exercise a balanced ap
Slide 12: Reconciliation to adjusted earnings and constant currency – 3Q 2015
Reconciliation to adjusted earnings and constant currency – 3Q 2015 14 The reconciliation below describes the items that management considers not representative of ongoing operations. Unaudited 2015 18 $ Restructuring, asset impairment and other charges 41 Strategic transaction costs 13 Acquisition-
Slide 13: Reconciliation to expected adjusted earnings - FY16 Fcst
Reconciliation to expected adjusted earnings - FY16 Fcst 15 Unaudited Low End of Guidance Range High End of Guidance Range 355 $ to 372 $ Items management considers not representative of ongoing operations: (a) Restructuring, asset impairment and related charges (b) 19 19 (7) (7) Net benefit for inc
Slide 14: Reconciliation to free cash flow
Reconciliation to free cash flow 16 Note: Management defines free cash flow as cash provided by continuing operating activities less additions to property, plant and equipment from continuing operations (both as determined in accordance with GAAP). $ Millions 2015 2016 Fcst Cash flows Cash provided
Slide 15: Pension accounting impacts annual EPS
1 Related to the “amortization of actuarial loss” component of pension expense, which is included in GAAP EPS and adjusted EPS Pension accounting impacts annual EPS 17 Sustained non cash pension expense reduces EPS by ~ $0.401 Actively managing pension liabilities $0.40 impact $0.00 $0.50 $1.00 $1.5
Slide 16: Asbestos payments impact annual free cash flow
1 Asbestos payments are included in Cash provided by continuing operating activities and free cash flow. See table entitled Reconciliation to free cash flow in the appendix of this presentation. Asbestos payments impact annual free cash flow 18 $130M estimated asbestos payments in 20161 $0 $100 $200
Slide 17: Impact from currency rates
Impact from currency rates 19 Approx. translation impact on EPS from 10% FX change Euro $0.10 Mexican peso $0.07 Brazilian real $0.05 Colombian peso $0.03 Australian dollar $0.05
Slide 18: Impact from currency rates
Impact from currency rates Euro Mexican peso Brazilian real Colombian peso Australian dollar Approx. translation impact on EPS from 10% FX change $0.10 $0.07 $0.05 $0.03 $0.05
Owens Illinois — Investor Presentation (September 2016) on 6ix