Slide 1: KeyBanc Basic Materials & Packaging Conference
KeyBanc Basic Materials & Packaging Conference Owens-Illinois, Inc. September 11, 2013
Slide 2: Safe Harbor Comments
Safe Harbor Comments Regulation G The information presented above regarding adjusted net earnings relates to net earnings attributable to the Company exclusive of items management considers not representative of ongoing operations and does not conform to U.S. generally accepted accounting principles
Slide 3: Global Leader in Glass Packaging
#1 position in Europe #1 position in Australia and New Zealand #1 in North America #1 positions in Brazil, Colombia, Ecuador, Peru Leading position within SE Asia Foothold in China and Argentina $13 billion manufacturing footprint* globally 79 plants and 148 furnaces in 21 countries $7 billion net s
Slide 4: O-I Investment Thesis
Global leader in glass packaging Sustainable secular trends in glass packaging Enhanced focus on value drivers, particularly reducing structural costs Rising and more consistent bottom line results Disciplined, balanced capital allocation 2012 2013 Guidance 2015 Target Free Cash Flow $290M > $300M >
Slide 5: Executing on our Value Drivers
Reduce structural costs Grow selectively Deliver brand-building product innovation Invest strategically in R&D to lower production costs Value Drivers Focus on value-added initiatives Manage progress against milestones Directly align incentive compensation to financial deliverables Execution 5 Execu
Slide 6: Driving Structural Cost Reductions
North America Drive further gains in asset efficiency Implement financially viable automation South America Optimize regional cost structure for growth Europe Drive multi-year asset optimization Leverage best practices Asia Pacific Implement cost reduction and productivity programs 6 Annual Savings
Slide 7: Generating Long-term Value
Generating Long-term Value 7 Strategic Investments in R&D Maintain balanced portfolio Short term vs long term Enhance manufacturing edge Energy efficiency Light weighting Roll out best practices Accelerate commercialization Grow Selectively Well positioned to harness growth in emerging regions 20% o
Slide 8: Rising Free Cash Flow Generation
Price to offset cost inflation Asset optimization and productivity improvements Reducing structural costs Profitable growth in South America Deleveraging Building on Fundamentals to Improve Financial Performance >$400M 8 >$300M Rising Free Cash Flow Generation
Slide 9: Capital Allocation Priorities
Leverage Ratio (Net debt to EBITDA)(1) Maintain split for use of free cash flow 90% – Pay down debt 10% – Repurchase shares No planned material M&A Small strategic bolt-ons possible 2013: primarily focused on deleveraging Anticipate reaching low end of leverage ratio Increase share repurchases Strat
Slide 10: 3Q13 Business Outlook
3Q13 Business Outlook 10 3Q13 vs. 3Q12 Comments Operational Europe Positive growth driven by share recapture in wine Asset optimization yields continuing benefits Tailwind from higher production compared to prior year North America Volumes flat* Improving structural costs South America Mid single di
Slide 11: Q&A
Q&A 11
Slide 12: Appendix
Appendix 12
Slide 13: Europe Overview
13 2010 2011 2012 2015 Target Sales (€ Millions) 2,086 2,177 2,105 ~1% Annual Segment Margin 12.4% 11.3% 11.3% ~14% Trends & Outlook Strong marketplace for glass packaging Weak macroeconomic conditions Price to offset inflation Management of production volatility Partial recapture of wine share Asse
Slide 14: North America Overview
North America Overview 14 2010 2011 2012 2015 Target Sales ($ Millions) 1,879 1,929 1,966 ~1% Annual Segment Margin 13.5% 11.5% 14.6% ~15% Trends & Outlook Stable macroeconomic conditions Mega beer contraction Strong growth in craft beer Gains in food, wine and spirits Good progress on structural co
Slide 15: South America Overview
15 Trends & Outlook Macroeconomic pressures Currency headwinds Regional softness in beer Gains in wine, food and spirits Ongoing cost optimization Improved asset utilization Low cost incremental capacity 2010 2011 2012 2015 Target Sales ($ Millions) 975 1,226 1,252 ~3% Annual Segment Margin 23.0% 20
Slide 16: Asia Pacific Overview
16 2010 2011 2012 2015 Target Sales ($ Millions) 996 1,059 1,028 < 1% Annual Segment Margin 14.5% 7.8% 11.0% 13-14% Trends & Outlook Australia and New Zealand Demand stabilizing Improved cost competitiveness Currency headwinds SE Asia Improving socioeconomic trends Growing middle class China Integra
Slide 17: Reconciliation of GAAP to Non-GAAP Items
Reconciliation of GAAP to Non-GAAP Items 17
Slide 18: Reconciliation of Segment Margin
Reconciliation of Segment Margin 18
Slide 19: Reconciliation to Free Cash Flow
Reconciliation to Free Cash Flow 19 $ 320 $ 322 $ 100 $ 220 $ 290 Free cash flow (340) (407) (500) (285) (290) Additions to property, plant and equipment - continuing $ 660 $ 729 $ 600 $ 505 $ 580 Cash provided by continuing operating activities 2008 2009 2010 2011 2012 Years ended December 31 $ Mil
Slide 20: Reconciliation of Credit Agreement EBITDA
20 Reconciliation of Credit Agreement EBITDA $ Millions 6/30/2013 3/31/2013 12/31/2012 9/30/2012 6/30/2012 Earnings (loss) from continuing operations 180 $ 178 $ 220 $ (406) $ (382) $ Interest expense 250 255 248 255 264 Provision for income taxes 93 97 108 113 110 Depreciation 367 371 378 384 388 A