O-i Glass, Inc. · NYSE:OI
O-i Glass — Q2 2024 Earnings Presentation
24 slides from O-i Glass's earnings presentation, Jul 31, 2024
Slide 1: Second Quarter 2024 Earnings
SECOND QUARTER 2024 EARNINGS JULY 30, 2024
Slide 2: Presenters
PRESENTERS Gordon Hardie John Haudrich President and CEO SVP and CFO 2
Slide 3: Safe Harbor Comments
SAFE HARBOR COMMENTS FORWARD-LOOKING STATEMENTS This presentation 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 4: Overview: Advancing New CEO Priorities as Markets Gradually Improve
OVERVIEW ADVANCING NEW CEO PRIORITIES AS MARKETS GRADUALLY IMPROVE ADJUSTED EARNINGS PER SHARE (aEPS, diluted) ► INTRODUCING GORDON HARDIE, NEW O-I CEO $1.00 • Initial Priority: Get O-I Fit to Win in a competitive marketplace ► $0.44 2Q24 aEPS AS “CONTROLLING WHAT WE CONTROL” AMID SOFT MACROS $0.88
Slide 5: CEO Insights & Operating Principles: Horizon 1 Fit to Win
CEO INSIGHTS & OPERATING PRINCIPLES ECONOMIC PROFIT MINDSET TO IMPROVE BUSINESS PERFORMANCE HORIZON 1: FIT TO WIN Address The Interference ► SIGNIFICANT STAKEHOLDER ENGAGEMENT • Many discussions with O-I colleagues, customers, suppliers and advisors 1) Enhance Competitiveness • Visited retail stores
Slide 6: Value Creation Roadmap
VALUE CREATION ROADMAP PRELIMINARY TARGETS¹ SIGNIFICANT EARNINGS IMPROVEMENT AND VALUE CREATION (2027) OPPORTUNITY THAT IS NOT DEPENDENT ON MARKET RECOVERY • Sustainable aEBITDA ≥ $1.45B • FCF ≥ 5% of Sales ECONOMIC PROFIT MINDSET • Economic Profit ≥ 2% above WACC CAPTURING MORE OF THE ECONOMIC PROF
Slide 7: Monetizing MAGMA
MONETIZING MAGMA MAGMA CONTINUES TO ADVANCE WITH INCREASED FOCUS ON ACCELERATING ECONOMIC PROFIT GEN 2 MAGMA GREENFIELD (Bowling Green, KY) ► MAGMA CORE TECHNOLOGY WORKS ► RAMPING UP MAGMA GEN 2 GREENFIELD IN BOWLING GREEN • Finalizing cold commissioning activities • Melter heat-up early August and
Slide 8: Expect Return to Growth 2H24
EXPECT RETURN TO GROWTH 2H24 GOOD SEQUENTIAL IMPROVEMENT IN 2Q24 GLASS DEMAND TRENDS 2Q24 CATEGORY TRENDS YoY Change in O-I Shipments (in tons)¹ YoY Change in O-I Shipments (in tons)¹ and Change in Consumer Consumption of Products in Glass Packaging2 16% 2% 12% 0% 8% -2% 4% -4% 0% -6% -4% -8% -10% O
Slide 9: 2Q24: Adjusted Earnings Down from PY
2Q24: ADJUSTED EARNINGS DOWN FROM PY LOWER 2Q24 ADJUSTED EARNINGS DUE TO A DECLINE IN SEGMENT OPERATING PROFIT Further details included in the appendix Corp Ret. +$0.11/sh Interest -$0.06/sh aTax Rate -$0.07/sh (36% 2Q24 vs 26% 2Q23) Share count +$0.01/sh 9 (1) Non-operating includes retained corpor
Slide 10: 2Q24: Segment Performance
2Q24: SEGMENT PERFORMANCE LOWER 2Q24 SEGMENT RESULTS REFLECTED LOWER NET PRICE, SOFTER DEMAND AND TEMPORARY PRODUCTION CURTAILMENT TO ALIGN SUPPLY WITH LOWER DEMAND Flat in Tons - Production curtailment -8.5% in Tons - Lower JV results - PY energy credits - Production curtailment + Margin expansion
Slide 11: 2024 Outlook
2024 OUTLOOK ADJUSTING FULL YEAR 2024 OUTLOOK TO REFLECT SOFTER THAN EXPECTED DEMAND AND RAPID INVENTORY CONTROL EFFORTS THAT WE EXPECT TO POSITION O-I WELL FOR 2025 APPRX. QUARTERLY ADJUSTED FY24 GUIDANCE CHANGE IN aEPS GUIDANCE aEPS DISTRIBUTION FY24 GUIDANCE Prior Guidance 1.50 - $2.00 CURRENT PR
Slide 12: Key Catalysts / Conclusion
CONCLUSION 1 ADVANCING NEW CEO PRIORITIES AND EMBRACING FIT TO WIN 2 2Q24 RESULTS - ‘CONTROLLING WHAT WE CONTROL’ AMID SOFT MACROS KEY CATALYSTS • Execute Fit to Win Program GOOD SEQUENTIAL VOLUME IMPROVEMENT IN 2Q24 AND 3 EXPECT RETURN TO GROWTH IN 2H24 • Drive Capital Discipline ADJUSTED 2024 OUTL
Slide 13: Appendix
APPENDIX
Slide 14: Our Sustainability Goals
OUR SUSTAINABILITY GOALS ZERO INJURIES SUPPLY CHAIN SUSTAINABILITY As part of our journey toward zero injuries, we are Achieve sustainability balance, together, by aligning committed to a 50% improvement of our Total our supply chain with our 2030 sustainability vision Recordable Incident Rate (TRIR
Slide 15: Summary Financial Results: 2Q24 vs 2Q23
SUMMARY FINANCIAL RESULTS: 2Q24 VS 2Q23 NET SALES SEGMENT OPERATING PROFIT $M except EPS and % AMERICAS EUROPE CORP TOTAL AMERICAS EUROPE TOTAL aEPS 2Q23 $ 996 $ 863 $ 31 $ 1,890 $126 $200 $326 $0.88 % Margin 12.7% 23.2% 17.5% FX (1) (7) - (8) 4 (3) 1 - SUBTOTAL $ 995 $856 $31 $1,882 $130 $197 $327
Slide 16: Segment FX Impact on Earnings
SEGMENT FX IMPACT ON EARNINGS APPROXIMATE ANNUAL IMPACT ON FX RATES AT KEY POINTS EPS FROM 10% FX CHANGE Jul 29, AVG AVG 2024 2Q24 2Q23 EUR 0.23 EUR 1.08 1.07 1.09 MXN 0.06 MXN 18.63 17.52 17.63 BRL 0.02 BRL 5.62 5.27 4.96 COP 0.02 COP 4,064 3,964 4,403 16 Current Business Outlook is Based on FX Rat
Slide 17: Non-GAAP Financial Measures
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 presentation
Slide 18: Reconciliation to Adjusted Earnings
RECONCILIATION TO ADJUSTED EARNINGS The Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP measure, adjusted earnings and adjusted earnings per share, for the periods ending after June 30, 2024 to its most directly comparable GAAP financial measure, net earnin
Slide 19: Segment Reconciliations
SEGMENT RECONCILIATIONS 2Q24 PRICE, SALES VOLUME AND CURRENCY IMPACT ON REPORTABLE SEGMENT SALES 2Q24 PRICE, SALES VOLUME, OPERATING COSTS AND CURRENCY IMPACT ON REPORTABLE SEGMENT OPERATING PROFIT 19 (a) Currency effect on net sales and segment operating profit determined by using 2024 foreign curr
Slide 20: Segment Reconciliations
SEGMENT RECONCILIATIONS YTD 2Q24 PRICE, SALES VOLUME AND CURRENCY IMPACT ON REPORTABLE SEGMENT SALES YTD 2Q24 PRICE, SALES VOLUME, OPERATING COSTS AND CURRENCY IMPACT ON REPORTABLE SEGMENT OPERATING PROFIT 20 (a) Currency effect on net sales and segment operating profit determined by using 2024 fore
Slide 21: Reconciliation for Segment Operating Profit
RECONCILIATION FOR SEGMENT OPERATING PROFIT 21
Slide 22: Reconciliation to Free Cash Flow
RECONCILIATION TO FREE CASH FLOW The Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP measures, free cash flow, for all periods after December 31, 2024 to its most directly comparable U.S. GAAP financial measure, cash provided by operating activities, withou
Slide 23: Reconciliation to Adjusted Effective Tax Rate
RECONCILIATION TO ADJUSTED EFFECTIVE TAX RATE 23
Slide 24: Additional Reconciliations
ADDITIONAL RECONCILIATIONS RECONCILIATION TO NET DEBT LEVERAGE RATIO For the year ending December 31, 2024, the Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP measure, net debt leverage ratio, which is defined as total debt less cash divided by Adjusted EB