O-i Glass, Inc. · NYSE:OI
O-i Glass — Q4 2020 Earnings Presentation
26 slides from O-i Glass's earnings presentation, Feb 10, 2021
Slide 1: 2020 Full Year and Fourth Quarter Earnings
2020 FULL YEAR AND FOURTH QUARTER EARNINGS FEBRUARY 10, 2021
Slide 2: Safe Harbor Comments
SAFE HARBOR COMMENTS Forward-Looking Statements This press release 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
OVERVIEW Results exceeded management guidance ● 4Q20 aEPS1 was $0.40, above guidance of $0.30 - $0.35 ● FY20 FCF2 was $146M, above guidance of ≥ $100M Stable demand amid ongoing global pandemic ● 4Q20 shipments ~ flat with prior year ● Consumers trust glass packaging on and off premise regardless of
Slide 4: Shipments Stabilize Across All Geographies
SHIPMENTS STABILIZE ACROSS ALL GEOGRAPHIE S 2020 O-I Shipment Trends (vs PY) 2020 Retail/Off Premise Consumer Consumption Trends (vs PY) 5% 40% O-I U.S. Beer U.S. Wine U.S. Spirits AM 0% U.S. Food Europe Alcohol Europe Food EU 30% -5% 20% -10% -15% 10% -20% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Note: Volumes a
Slide 5: 2020 Key Accomplishments
2020 KEY ACCOMPLISHMENTS ■ Executing the Strategic and Tactical divestiture programs including ANZ sale; reducing debt • Anticipate total proceeds ~ $1.1B, including $677 million from ANZ and $400-$500 million from Tactical divestitures upon completion ■ Improved financial flexibility despite pandem
Slide 6: Organized for Solid Execution
ORGANIZED FOR SOLID EXECUTIO N L E V E R A G I N G A D VA N C E D C A PA B I L I T I E S B U I LT I N R E C E N T Y E A R S People and Organization Capital Structure Discipline Rigorous / integrated O-I People System • Capital • Maximize FCF / EBITDA Conversion People and • Maintain strong liquidity
Slide 7: 2020-2021 ESG Acceleration
2020-2021 ESG ACCELERATION Expanded Initiatives and New Goals Across 9 Dimensions Our Structural Acceleration Leading the Way ● Enhanced Rigor of Board Governance ● First glass container maker to have SBTi approved emissions target ● Appointed CSO mid-2020 ● First packaging company to offer green bo
Slide 8: 2021 Priorities
2021 PRIORITIES B O L D S T R U C T U R A L A C T I O N S T O C H A N G E O - I ’ S B U S I N E S S F U N D A M E N TA L S 1 2 3 MARGIN REVOLUTIONIZE OPTIMIZE EXPANSION GLASS STRUCTURE STRONG OPERATING PERFORMANCE C R E AT E A N E W B U S I N E S S M O D E L REBALANCE BUSINESS PORTFOLIO AND COST EFF
Slide 9: 2020 Results
2020 RESULTS PA N D E M I C I M PA C T E D E A R N I N G S : ~ 4 % L O W E R S A L E S , ~ 7 . 5 % L O W E R P R O D U C T I O N SEGMENT FY20 aEPS was $1.22 compared to $2.24 in PY OPERATING PROFIT1 ($M) aEPS ● ~ $1/sh gross impact of lower sales and production levels due to the pandemic FY19 AS REP
Slide 10: 2020 FCF and Capital Structure
2020 FCF AND CAPITAL STRUCTURE HIGHER FCF AND LOWER NET DEBT CAPITAL ALLOCATION GUIDING PRINCIPLES FY20 FCF1 AND NET DEBT2 FAVORABLE TO PY GUIDING PRINCIPLE PROGRESS 800 FCF Progression 561 Maximize Free Cash Flow1 400 112 205 316 264 146 ● Strong free cash flow ● FY20 FCF $146M vs $(18)M in PY 0 ($
Slide 11: 4Q20 Results
4Q20 RESULTS HIGHER SEGMENT OPERATING PROFIT (EXCLUDING DIVESTITURES AND FX) SEGMENT OPERATING 4Q20 aEPS was $0.40 compared to $0.50 in PY PROFIT1 ($M) aEPS 4Q19 AS REPORTED $203 $0.50 ● Current year results reflect recent divestitures FX2 (4) (0.03) Higher segment operating profit (excluding divest
Slide 12: 4Q20 Segment Review
4Q20 SEGMENT REVIEW IMPROVED PROFITS IN BOTH AMERICAS AND EUROPE AMERICAS EUROPE ASIA PACIFIC1 SEGMENT SEGMENT SEGMENT OPERATING OPERATING OPERATING ($M) PROFIT COMMENTS PROFIT COMMENTS PROFIT COMMENTS 4Q19 $115 $69 $19 FX (8) 4 -- Divestitures -- -- (19) ▼ ANZ sale SUBTOTAL $107 $73 $0 Net price (9
Slide 13: 2021 Business Outlook
2021 BUSINESS OUTLOOK I M P R O V I N G O U T L O O K A S M A R K E T S S TA B I L I Z E A N D R E C O V E R EARNINGS OUTLOOK (aEPS) FCF OUTLOOK ($M) FY21 1Q21 FY21 2020 AS REPORTED $1.22 $0.41 2020 AS REPORTED $146 14% Adj EBITDA conversion5 FX1 $0.02 $0.00 FX1 ($15) Divestitures2 Divestitures2 $50
Slide 14: Conclusion
CONCLUSIO N 2020 results above most recent guidance Stable demand amid ongoing pandemic Organized for execution – leveraging new capabilities Sustainability Clear priorities for 2021 Message Improving business outlook and volume growth 14
Slide 15: Financial Appendix
FINANCIAL APPENDIX
Slide 16: FX Impact on Earnings
FX I M PACT O N EARNI NG S APPROXIMATE ANNUAL IMPACT ON FX RATES AT KEY POINTS EPS FROM 10% FX CHANGE Jan 31st Avg Avg 2021 1Q20 2020 EUR 0.13 EUR 1.21 1.10 1.15 MXN 0.04 MXN 20.35 20.74 21.56 BRL 0.03 BRL 5.44 4.64 5.21 COP 0.01 COP 3,558 3,655 3,715 16
Slide 17: Non-GAAP Financial Measures
NO N- G AAP FI NANCI AL M EASUR 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 prese
Slide 18: Reconciliation for Adjusted Earnings
The reconciliation below describes the items that management considers not representative of ongoing operations. RECO NCI LI AT I O N FO R Unaudited Three months ended 2020 December 31 2019 2020 Year ended December 31 2019 ADJUSTED EARNI NG S Earnings (loss) from continuing operations attributable t
Slide 19: Reconciliation to Earnings from Continuing Operations Before Income Taxes
Three months ended Year ended Unaudited December 31 December 31 R E C O N C I L I AT I O N T O E A R N I N G S 2020 2019 2020 2019 Net sales: Americas $ 880 $ 890 $ 3,322 $ 3,622 F R O M C O N T I N U I N G O P E R AT I O N S Europe Asia Pacific 589 - 553 153 2,364 281 2,387 534 B E F O R E I N C O
Slide 20: 4Q Price, Volume and Currency Impact on Reportable Segment Sales
4Q PRI CE, VO LUM E AND CURRENCY I M PACT O N REPO RTABL E SEG M ENT SALES Three months ended December 31, Americas Europe Asia Pacific Total Net sales for reportable segments- 2019 $ 890 $ 553 $ 153 $ 1,596 Effects of changing foreign currency rates (a) (47) 36 (11) Price 19 14 33 Sales volume & mi
Slide 21: Full Year Price, Volume and Currency Impact on Reportable Segment Sales
FULL YEAR PRI CE, VO LUM E AND CURRENC Y I M PACT O N REPO RTABL E SEG M ENT SALES Year ended December 31, Americas Europe Asia Pacific Total Net sales for reportable segments- 2019 $ 3,622 $ 2,387 $ 534 $ 6,543 Effects of changing foreign currency rates (a) (204) 41 (17) (180) Price 30 51 81 Sales
Slide 22: Reconciliation for Free Cash Flow and Net Debt
RECO NCI LI AT I O N FO R FREE CASH FLO W Forecast for Three Months Ended Year Ended Year Ended March 31, June 30, Sept 30, Dec 31, March 31, June 30, Sept 30, Dec 31, Dec 31, Dec 31, 2020 2020 2020 2020 2019 2019 2019 2019 2020 2019 Dec 31, 2021 Cash provided by (utilized in) continuing operating a
Slide 23: Reconciliation for Adjusted EBITDA Conversion
RECO NCI LI AT I O N FO R ADJUSTED EBI TDA CO NVERSI O N Year Ended Dec 31, 2020 Earnings (loss) from continuing operations before income taxes $ 353 Interest expense, net (265) Earnings (loss) before interest and taxes (non GAAP) $ 618 Depreciation and amortization 482 Earnings (loss) before intere
Slide 24: Reconciliation for Adjusted Net Interest Expense
RECO NCI LI AT I O N FO R ADJUSTED NET I NTERES T EXPEN S E Unaudited Three Months Ended Year Ended Dec 31, Dec 31, Dec 31, Dec 31, 2020 2019 2020 2019 Interest expense, net $ (53) $ (96) $ (265) $ (311) Items impacting interest expense (a) - 39 44 65 Adjusted Net Interest Expense $ (53) $ (57) $ (2
Slide 25: Reconciliation for Adjusted Effective Tax Rate
RECO NCI LI AT I O N FO R ADJUSTED EFFECT I V E TAX RATE Unaudited Three Months Ended Year Ended December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Earnings (loss) from continuing operations before income taxes (A) $14 $65 $353 $ (261) Items management considers not representati
Slide 26: Reconciliation for 1Q Adjusted Earnings
RECO NCI LI AT I O N FO R 1Q 20 ADJUSTE D EARNI NG S 26