O-i Glass, Inc. · NYSE:OI
O-i Glass — Owens Illinois — Investor Presentation (November 2017)
18 slides from O-i Glass's investor presentation, Nov 29, 2017
Slide 1: Safe harbor comments
Safe harbor comments 2 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
Slide 2: Forward-Looking Statements
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 Company's current expectation
Slide 3: Why invest in O-I?
Why invest in O-I? 4 Investment Thesis Global leader in glass packaging Well positioned to modestly grow volume Secular trends support glass container growth Attractive opportunities in high value segments Develop new business Evident impact from commercial capabilities and total systems cost Demons
Slide 4: 2017 financial expectations on track with guidance
2017 financial expectations on track with guidance 5 1 See reconciliation tables in the appendix of this presentation. 2 Segment operating profit is defined as consolidated earnings before interest income, interest expense, and provision for income taxes and excludes amounts related to certain items
Slide 5: Integrated Americas team; Strategic Joint Venture with Constellation
Integrated Americas team 6 Optimization Better serve the market by leveraging the Americas footprint Integrate business planning across region Optimize end-to-end supply chain and commercial activities Americas segment reporting begins 1Q18 Strategic Joint Venture with Constellation Extending JV agr
Slide 6: Higher segment operating profit & margin expected in 2018
Higher segment operating profit & margin expected in 2018 7 AMERICAS EUROPE Trends Non-beer segments continue to grow Ongoing U.S. mainstream beer trends; strong performance in imports Strong demand in Mexico Further recovery in Brazil Trends Supply/demand dynamics essentially unchanged Constructive
Slide 7: 2018 non-operational outlook
2018 non-operational outlook 8 Corporate expense expected to be higher than 2017 Higher level of investments to drive sustainable value Layering in additional end-to-end supply chain capabilities Continuing support for successful R&D platforms Pension expense expected to be modestly higher than 2017
Slide 8: Higher Adjusted EPS expected in 2018
9 Higher Adjusted EPS expected in 2018 Improved business performance adds >40 bps margin growth Global sales volume up ~1% vs. 2017 Total Systems Cost benefits Incremental benefit of ~$12M from closure of plant in Europe Modestly favorable interest expense Price offsets inflation Incremental asset i
Slide 9: 2018 Adjusted FCF outlook
2018 Adjusted FCF outlook 10 Growth in segment operating profit Continued contribution from working capital, mainly inventory Capital expenditures of ~$500M Lower restructuring payments than in 2017 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 2015 2016 2017f 2018e $ Millions CASH FROM CONTINUING
Slide 10: Pension: On-going risk mitigation
Pension: On-going risk mitigation 11 Reduced pension liabilities by $500 million already in 4Q17 through annuity purchases De-risking efforts reducing our sensitivity to changes in discount rates 50 bps change in discount rate leads to ~$7M pre-tax impact, compared with ~$20M in 2012 1 Related to th
Slide 11: Continued favorable trends in asbestos
Continued favorable trends in asbestos 12 1 year ASBESTOS PAYMENTS TOTAL EXPECTED ASBESTOS-RELATED LIABILITY1 1 The Company’s ultimate asbestos-related liability cannot be estimated with certainty. As part of its future comprehensive annual reviews, the Company will estimate its total asbestos-relat
Slide 12: Capital structure
13 Capital structure Deleveraging: continues to be key priority Improved debt profile No Senior Notes due until 2020 Higher proportion of non-USD debt as natural hedge to foreign currency Improving leverage ratio ~3 times net debt to EBITDA by end of 2018
Slide 13: 2018 in-line with Investor Day commitments
2018 in-line with Investor Day commitments 14 Key annual targets Strong financial performance in 2017 Investor Day: 3-year target Current expectation Adjusted EPS 10% CAGR for 2016-18 Higher1 Adjusted free cash flow >$400M in 2018 On Track Deleveraging Track towards ~3x leverage by YE18 On Track Ann
Slide 14: 2018 in-line with Investor Day commitments
I 2018 in-line with Investor Day commitments Key annual targets Current xpectation 10% CAGR for jigher* Adjusted EPS paieea Higher’ Adjusted free cash flow >S$400Min 2018 On Track Track towards ~3x Deleveraging leverage by Ye1e. ON Track Annual organic volume ye aan 1% post 2016 On Track Annual segm
Slide 15: Reconciliation to Expected Adjusted Earnings – FY17 and 4Q17 Forecasts
Reconciliation to Expected Adjusted Earnings – FY17 and 4Q17 Forecasts 16
Slide 16: Reconciliation to Adjusted Free Cash Flow
Reconciliation to Adjusted Free Cash Flow 17 Note: Management defines adjusted free cash flow as cash provided by continuing operating activities less additions to property, plant and equipment plus asbestos-related payments (all components as determined in accordance with GAAP). $ Millions Unaudite
Slide 17: Impact from Currency Rates
Impact from Currency Rates 18 Approximate annual translation impact on EPS from 10% FX change Euro $0.08 Mexican peso $0.04 Brazilian real $0.03 Colombian peso $0.01 AU & NZ dollar $0.04
Slide 18: Impact from Currency Rates
j Impact from Currency Rates Approximate annual translation impact on EPS from 10% FX change Euro $0.08 Mexican peso $0.04 Brazilian real $0.03 Colombian peso $0.01 AU & NZ dollar $0.04
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