O-i Glass, Inc. · NYSE:OI
O-i Glass — Owens Illinois — Credit Suisse 32nd Annual Basic Materials Conference 2019
16 slides from O-i Glass's conference presentation, Sep 10, 2019
Slide 1: 32nd Annual Basic Materials Conference - 2019
32 ND ANNUAL BASIC MATERIALS CONFERENCE - 2019 ANDRES LOPEZ - CEO JOHN HAUDRICH - CFO CREDIT SUISSE // September 10, 2019
Slide 2: Safe Harbor Comments
2 SAFE HARBOR COMMENTS Forward - Looking Statements This document contains "forward - looking" statements 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. Forward - looking statements reflect the
Slide 3: Focused on Cash Flow Generation and Debt Reduction: Why Consider O-I?
FOCUSED ON CASH FLOW GENERATION AND DEBT REDUCTION 3 WHY CONSIDER O - I ? ● Leading glass packaging company with global reach to partner with growing brands spanning a broad range of end use categories ● Glass to benefit from megatrends like premiumization and sustainability ● MAGMA represents a bre
Slide 4: Stable Earnings – Actions to Accelerate Performance
STABLE EARNINGS – ACTIONS TO ACCELERATE PERFORMANCE ● Secured 8% of the Targeted 10% Cumulative New Volume Growth ● Ongoing Structural Cost Programs Delivering Results ● Next MAGMA Pilot Targeted for Holzminden Germany in 2H19 ● Capital Allocation Skewed Toward Debt Reduction 4 VALUE CREATION LEVERS
Slide 5: Global O-I Network Volume Trends Generally Stable
GLOBAL O - I NETWORK VOLUME TRENDS GENERALLY STABLE – ADDRESSING POCKETS OF CHALLENGING DEMAND TRENDS 5 40% 17% 18% 9% 13% 3% Beer Food NAB Wine Spirits Other -4.0% -2.0% 0.0% 2.0% 4.0% 2014 2015 2016 2017 2018 Total O-I Legacy Total O-I Network -10.0% -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 2014 201
Slide 6: MAGMA Breakthrough Innovation
MAGMA BREAKTHROUGH INNOVATION Reinvent how glass can be made: ● New capacity at lower capital commitment and intensity ● Total cost of ownership below legacy ● Increased scalability ● Rapid new capacity deployment and asset portability ● Production flexibility to support diversified offerings ● Comp
Slide 7: Glass: The World's Most Sustainable Package
GLASS: THE WORLD’S MOST SUSTAINABLE PACKAGE 7 In a world where sustainability is more important than ever, we are proud to make an inherently sustainable product. ● Made from natural, readily available raw materials ● 100 percent endlessly recyclable into new food - safe glass packaging ● Great fit
Slide 8: Outlook Update
OUTLOOK UPDATE 8 3Q19 OUTLOOK $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 Previous 3Q19 Guidance FX Sales Vol Cost Adjusted 3Q19 Outlook 0.60 - 0.65 0.52 - 0.55 FX Sensitivity: ● aEPS – FX pressures (8/31 vs 7/30 rates) represents a potential ~$ 0.10 headwind to FY19 aEPS outlook of $2.40 - $2.5
Slide 9: Capital Allocation Directed to Liability Reduction
9 CAPITAL ALLOCATION DIRECTED TO LIABILITY REDUCTION De - risk Balance Sheet ● Deleveraging: A top priority to reach ~3.0x by 2021 ● Asbestos: De - risking plan on track ● Pension: Reduction in PBO to minimize risk ● Divestitures: Actively engaged on projects to drive debt down Fund Strategy ● CapEx
Slide 10: Key Conclusions
10 KEY CONCLUSIONS ● Strong competitive position as preferred global glass supplier ● Positioned to capture future volume growth in glass ● MAGMA development represents a breakthrough technology ● Taking necessary steps to accelerate performance ● Capital allocation focused on liability reduction ●
Slide 11: Appendix
APPENDIX
Slide 12: Non-GAAP Financial Measures
12 NON - GAAP FINANCIAL MEASURES 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 presen
Slide 13: FX Impact on Earnings
13 FX IMPACT ON EARNINGS APPROXIMATE ANNUAL TRANSLATION IMPACT ON EPS FROM 10% FX CHANGE EUR $0.08 MXN $0.04 BRL $0.03 COP $0.01 AUD $0.04 FX RATES USED FOR FY19 GUIDANCE (AUGUST 30, 2019) EUR 1.10 MXN 20.2 BRL 4.17 COP 3,436 AUD 0.67
Slide 14: Reconciliation for Adjusted EBITDA
14 RECONCILIATION FOR ADJUSTED EBITDA
Slide 15: Reconciliation for Estimated Adjusted Free Cash Flow
15 RECONCILIATION FOR ESTIMATED ADJUSTED FREE CASH FLOW & NOTE TO ESTIMATED ADJUSTED EARNINGS Note: For all periods after June 30, 2019, the Company is unable to present a quantitative reconciliation of its forward - looki ng non - GAAP measure, adjusted earnings and adjusted earnings per share to i
Slide 16: Reconciliation for Leverage Ratio
16 RECONCILIATION FOR LEVERAGE RATIO Note: For all periods after 2018, the Company is unable to present a quantitative reconciliation of its forward - looking non - GAAP measure, net debt divided by Credit Agreement EBITDA, to its most directly comparable U.S. GAAP financial measure, Net Earnings, b
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