O-i Glass, Inc. · NYSE:OI
O-i Glass — Q2 2021 Earnings Presentation
21 slides from O-i Glass's earnings presentation, Aug 4, 2021
Slide 1: Second Quarter 2021 Earnings
SECOND QUARTER 2021 EARNINGS AUGUST 04, 2021
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: Overview
OV E RV I EW Stone Brewing New Hard Seltzer Launched in Glass 2Q21 RESULTS EXCEEDED GUIDANCE AND PRIOR YEAR • 2Q21 aEPS1 was $0.54 compared to guidance of $0.45 – $0.50 and prior year of $0.01 FAVORABLE PERFORMANCE ACROSS KEY BUSINESS LEVERS IN 2Q21 • Leveraging preference for glass as the healthy,
Slide 4: Shipments recover to pre-pandemic levels
S H I P ME N TS R E C OV E R TO P R E -PANDE M IC L E V E L S EXPECTED VOLUME GROWTH: 0% – 1% 3Q21; 4% – 5% FY21 O-I SHIPMENT TRENDS (VS PY) EST. FOOD & BEV CONSUMPTION TRENDS BY CHANNEL 25% 150 20% Pandemic Recent packaging demand trends continue to reinforce this perspective 15% disruption 125 111
Slide 5: Advancing Bold Plan to change business fundamentals
A DVA N C I N G B O L D P L A N TO C H A N G E B U S I N E S S F U N DA M E N TA L S ENABLING A NEW PERIOD OF PROSPERITY 2021 PRIORITIES HIGHLIGHTS ❶ MARGIN EXPANSION – STRONG OPERATING PERFORMANCE AND COST EFFICIENCIES $50M initiative benefits $40M benefits YTD; Expect savings will exceed full year
Slide 6: Innovation Drives Sustainability
I N N OVAT I O N D R I V E S S U S TA I N A B I L I T Y THE MOST SUSTAINABLE PRODUCER OF THE MOST SUSTAINABLE RIGID PACKAGING sus-tain-a-bil-i-ty \sə ‘stān-nə-‘bil-ət-ē\ n. Creating a strong, resilient organization with longevity— seeking balance with the needs of people, the planet, and our collect
Slide 7: 2Q21 Results vs. 2Q20
2 Q 2 1 R E S ULT S V S . 2 Q 2 0 EARNINGS UP SIGNIFIC ANTLY FROM PY AND EXCEEDED GUIDANCE SEGMENT 2Q21 aEPS WAS $0.54 VS. $0.01 PY AND $0.45– $0.50 GUIDANCE OPERATING • Solid recovery from pandemic onset in 2Q20 PROFIT1 ($M) aEPS • Sales volume exceeded expectation of 15%+ 2Q20 AS REPORTED $99 $0.0
Slide 8: 2Q21 Segment Review
2Q21 SEGMENT REVIEW SIGNIFIC ANT IMPROVEMENT VS PY DRIVEN BY HIGHER SALES AND PRODUCTION AMERICAS EUROPE ASIA PACIFIC1 SEGMENT SEGMENT SEGMENT OPERATING OPERATING OPERATING ($M) PROFIT COMMENTS PROFIT COMMENTS PROFIT COMMENTS 2Q20 $52 $42 $5 FX (2) 4 — Divestitures 2 — (5) ▼ ANZ sale SUBTOTAL $52 $4
Slide 9: 2Q21 Results vs. 2Q19
2 Q 2 1 R E S ULT S V S . 2 Q 1 9 UNDERLYING PERFORMANCE EXCEEDED PRE-PANDEMIC LEVELS SEGMENT OPERATING 2Q21 UNDERLYING PERFORMANCE FAVORABLE TO 2Q19 PROFIT1 ($M) aEPS • Segment operating profit up $7M adjusted for FX, divestitures and temporary items 2Q19 AS REPORTED $243 $0.69 • Higher prices subs
Slide 10: FCF and Capital Structure
2 0 2 1 F C F A N D C A P I TA L S T RU C T U R E FY21 FCF1 AND NET DEBT2 FAVORABLE TO PY 1H21: HIGHER FCF AND LOWER NET DEBT FCF Progression 800 GUIDING PRINCIPLE PROGRESS 560 400 316 264 Maximize Free Cash Flow1 117 112 205 ($M) 0 FY21 FCF: ~$260M (20-25% conversion) 2Q21 FCF $117M; 1H21 FCF ($32)
Slide 11: Business Outlook
2 0 2 1 BUS I N E S S O UT L O O K IMPROVING OUTLOOK AS MARKETS STABILIZE AND RECOVER 3Q21 EARNINGS OUTLOOK (aEPS) 3Q21 GUIDANCE: $0.47 – $0.52 aEPS COMPARED TO $0.41 IN PY 3Q20 AS REPORTED $0.41 • Higher selling prices should partially offset elevated cost inflation FX1 $0.02 • Expect improved volu
Slide 12: Conclusion
C O N CLUS ION 2Q21 results above guidance on strong volumes Fav. underlying performance across key business levers Step change in ability to consistently perform and deliver Advancing bold plan to change O-I’s business fundamentals Improving business outlook and volume growth 12
Slide 13: Financial Appendix
ae). FINANCIAL APPENDIX
Slide 14: Segment FX Impact on Earnings
1 Q 2 1 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 Jul 31st AVG Avg Avg Avg 2021 2Q21 2Q20 3Q20 2020 EUR 0.08 EUR 1.19 1.21 1.11 1.18 1.15 MXN 0.04 MXN 19.89 19.92 22.98 22.08 21.56 BRL 0.03 BRL 5.08 5.18 5.38 5.39 5.21 COP
Slide 15: 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 16: Reconciliation to Earnings Before Income Taxes
R E C O N C I L I AT I O N TO E A R N I N G S B E F O R E I N C O M E TA X E S Three months ended Six months ended Unaudited June 30 June 30 2021 2020 2019 2021 2020 Net sales: Americas $ 890 $ 724 $ 934 $ 1,727 $ 1,555 Europe 745 555 650 1,384 1,132 Asia Pacific 106 122 229 Reportable segment total
Slide 17: Segment Reconciliations
S E G M E N T R E C O N CILIAT IONS 2Q PRICE,VOLUME AND CURRENCY IMPACT ON REPORTABLE SEGMENT SALES Three months ended June 30, Americas Europe Asia Pacific Total Net sales for reportable segments- 2020 $ 724 $ 555 $ 106 $ 1,385 Effects of changing foreign currency rates (a) 28 51 79 Price 23 4 27 S
Slide 18: Segment Reconciliations
S E G M E N T R E C O N CILIAT IONS JUNE YTD PRICE,VOLUME AND CURRENCY IMPACT ON REPORTABLE SEGMENT SALES Six months ended June 30, Americas Europe Asia Pacific Total Net sales for reportable segments- 2020 $ 1,555 $ 1,132 $ 229 $ 2,916 Effects of changing foreign currency rates (a) 15 98 113 Price
Slide 19: Reconciliation for Adjusted Earnings
R E C O NCILIATIO N F O R AD J US T E D E AR N I N GS Three months ended Six months ended Unaudited Three months ended June 30 September 30, June 30 2021 2020 2019 2020 2021 2020 Net earnings (loss) attributable to the Company $ 118 $ (101) $ 66 $ 328 $ 21 $ (51) Items impacting cost of good sold: P
Slide 20: 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 Unaudited Three Months Ended June 30, June 30, June 30, 2021 2020 2019 Earnings (loss) before income taxes (A) $ 198 $ (119) $ 98 Items management considers not representative of ongoing operations (60) 121 44 Adjusted Ea
Slide 21: Additional Reconciliations
AD D I TIO NAL R E C O NCILIATIO NS RECONCILIATION TO NET DEBT Forecasted Year Ended March 31, June 30, March 31, June 30, Sept 30, Dec 31, March 31, June 30, Sept 30, Dec 31, 2021 2021 2020 2020 2020 2020 2019 2019 2019 2019 December 31, 2021 Total debt $ 5,348 $ 5,062 $ 6,398 $ 6,507 $ 5,375 $ 5,1