O-i Glass, Inc. · NYSE:OI
O-i Glass — Owens Illinois — Q2 2011 Earnings Presentation
16 slides from O-i Glass's earnings presentation, Jul 27, 2011
Slide 1: O-I Earnings Presentation Second Quarter 2011
O-I Earnings Presentation Second Quarter 2011 Owens-Illinois, Inc.
Slide 2: Introduction, Regulation G and Forward Looking Statements
1 Introduction Agenda Business discussion Financial review Business outlook Concluding remarks and Q&A Presenters Regulation G The information included in this presentation regarding adjusted net earnings relates to net earnings attributable to the Company exclusive of items management considers not
Slide 3: Second-Quarter 2011 Results Business Discussion
2 Second-Quarter 2011 Results Business Discussion 2Q11: $0.59/sh EPS, $97M Free Cash Flow Shipments up >6% Acquisitions add 5% volume Organic up >1% (up 3% excluding Aust. and NZ) Volume up in all key end markets Significantly higher manufacturing costs Elevated cost inflation, 2H energy surcharge i
Slide 4: European Segment Review
European Segment Review Business Discussion 2Q11 business trends (YoY) Favorable FX translation Volumes up mid-single digits Demand up across all key end-use segments Price flat Higher cost inflation Energy surcharge Customer negotiations completed Expect $15 to $20M benefit in 2H11 New strategic pa
Slide 5: South America Segment Review
South America Segment Review Business Discussion 4 2Q11 business trends (YoY) Volume up ~35% Driven by acquisitions Organic growth led by Brazil, Argentina and Peru 18% margin despite following factors: Higher cost inflation to be passed through 2H11 Price – higher prices offset by mix Regional impo
Slide 6: North America Segment Review
5 North America Segment Review Business Discussion 2Q11 business trends (YoY) Volume down slightly Fundamental demand up low single digits Lost sales due to production issues Similar volume to prior year despite 2 fewer plants $26M production inefficiencies / logistics costs Remediation plan and mil
Slide 7: Asia Pacific Segment Review
6 Asia Pacific Segment Review Business Discussion 2Q11 business trends (YoY) Total regional volume up low single digits China volume up significantly due to acquisitions Aust. and NZ beer and wine shipments down ~20% Macro issues (high currency, lower disposable income) $7M lower than expected sales
Slide 8: Strategic Priorities are Driving Value
Strategic Priority Benefits Operational Excellence Global Footprint realignment $245M benefit 2007-2010 Refocus on execution in 2011 Integrated operations structure Strategic & Profitable Growth Acquired 10 plants in 2010 Emerging market focus ~20% operating profit margin Marketing Glass glass smart
Slide 9: Stronger Sales Offset by Higher Manufacturing Costs
8 Stronger Sales Offset by Higher Manufacturing Costs Financial Review 1 Reportable segment sales in 2Q11 exclude $18 million of revenue, principally for the Company’s global equipment sales business. 2 Contractual cost pass-through provisions conducted on a monthly or quarterly basis had an immater
Slide 10: Balance Sheet, Cash Flow and Capital Structure
9 Balance Sheet, Cash Flow and Capital Structure Financial Review Highlight of Select Balance Sheet and Cash Flow Items (1) ($ Millions) 1 All information presented is from continuing operations only. 2 Total debt less cash divided by bank credit agreement EBITDA. The 2Q11 and 2Q10 ratios were calcu
Slide 11: 3Q11 Business Outlook and FY11 Cost Inflation Estimate
3Q11 Business Outlook and FY11 Cost Inflation Estimate Favorable / Unfavorable Impact on Earnings 3Q11 vs 3Q10 Comments Operating Profit Europe Favorable volumes Higher price offset by inflation North America Improving supply chain and production efficiencies Inflation > price until 2012 contractual
Slide 12: Concluding Remarks and Q&A
Concluding Remarks and Q&A Remediation plans to address North America and Australia/NZ challenges Maximize O-I’s long-term earnings power Expect $200 to $250M free cash flow in 2011 Primary uses of cash include implementing remediation plans, expansion in South America and debt reduction Strategy un
Slide 13: Appendix
Appendix
Slide 14: Reconciliation of GAAP to non-GAAP Items
13 Reconciliation of GAAP to non-GAAP Items 168.6 166.2 166.5 166.3 Diluted shares outstanding (millions) $ 1.32 $ 222 $ 1.06 $ 176 $ 0.84 $ 140 $0.59 $ 98 Adjusted net earnings 0.05 8 0.05 8 0.05 8 0.02 3 asset impairment Charges for restructuring and • 0.15 24 0.15 24 Charges for note repurchase p
Slide 15: Free Cash Flow
14 Free Cash Flow (1) Free Cash Flow equals cash provided by continuing operating activities less capital spending from continuing operations. $ Million Three months ended June 30 Six months end June 30 2011 2010 2011 2010 Net earnings $80 $155 $156 $249 Less: Earnings from disc. operations (2) (12)
Slide 16: Reconciliation of Credit Agreement EBITDA to Net Earnings
Reconciliation of Credit Agreement EBITDA to Net Earnings Attributable from Continuing Operations 15 (1) Adjustments made are in accordance with the bank credit agreement and may not agree to the amounts recorded in the Company’s financial statements. $ Millions 2011 2010 Net Income from continuing