O-i Glass, Inc. · NYSE:OI
O-i Glass — Q2 2020 Earnings Presentation
20 slides from O-i Glass's earnings presentation, Aug 5, 2020
Slide 1: 2Q 2020 Earnings
2Q 2020 EARNINGS AUGUST 5, 2020
Slide 2: 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 Securitie
Slide 3: Overview
OVERVIEW 2Q20 results were consistent with recent business update ● aEPS1 $0.01 and $112M FCF2 O-I has responded to pandemic with speed and agility ● Profitable with strong cash flow despite pandemic and significant lockdowns in Mexico / Andean Bold actions to execute O-I investment thesis are deliv
Slide 4: Responding to Pandemic with Speed and Agility
RESPONDING TO PANDEMIC WITH SPEED AND AGILITY Align Supply Operating Strict Cost Capital Capital with Demand Efficiency Controls Management Allocation • Swift action • Turnaround initiatives • Reducing spend • 2020 CapEx ≤ $300M • Suspend dividend • IDS ≤ PY by 3Q • Includes focus factories • Reduct
Slide 5: Executing O-I Glass Value Creation Thesis
EXECUTING O-I GLASS VALUE CREATION THESIS B O L D S T R U C T U R A L A C T I O N S T O C H A N G E O - I ’ S B U S I N E S S F U N D A M E N TA L S 1 2 3 TURNAROUND REVOLUTIONIZE OPTIMIZE INITIATIVES GLASS STRUCTURE STRONG OPERATING PERFORMANCE C R E AT E A N E W B U S I N E S S M O D E L REBALANCE
Slide 6: Improving Shipment Trends Across All Geographies
IMPROVING SHIPMENT TRENDS ACROSS ALL GEOGRAPHIES O-I Shipment Trends (vs PY) Retail/Off Premise Consumer 20% 40% Consumption Trends (vs PY) 30% 10% 20% 0% 10% -10% 0% U.S. Beer -10% U.S. Wine -20% O-I -20% U.S. Spirits -30% AM U.S. Food -30% Europe Alcohol EU -40% -40% Europe Food Jan Feb Mar Apr Ma
Slide 7: 2Q20 Results Consistent with Business Update
2Q20 RESULTS CONSISTENT WITH BUSINESS UPDATE 2Q20 aEPS: $0.01 | 2Q20 SEGMENT PROFIT1: $95M 2Q20 aEPS was $0.01 SEGMENT OPERATING ● Consistent with recent business update indicating ~ breakeven results PROFIT ($M) aEPS 2Q19 AS REPORTED $ 236 $ 0.69 2 (6) (0.03) Impact of pandemic partially offset by
Slide 8: 2Q20 Segment Review
2Q20 SEGMENT REVIEW AMERICAS EUROPE ASIA PACIFIC ▼ $52M vs $144M PY ▼ $42M vs $90M PY ► $1M vs $2M PY Results • FX -$4M • FX -$3M • FX +$1M ▲ Constructive price environment ▲ Constructive price environment ► Stable price Net Price • Revenue Optimization • Revenue Optimization ▼ FX induced inflation
Slide 9: 2020 Capital Allocation Considerations
2 0 2 0 C A P I TA L A L L O C AT I O N C O N S I D E R AT I O N S CAPITAL ALLOCATION GUIDING PRINCIPLES YTD FCF1 AND NET DEBT2 FAVORABLE TO PY FCF Progression GUIDING PRINCIPLE PROGRESS 800 561 400 316 Maximize Free Cash Flow1 112 • Capex at or below $300M • 2Q20 FCF $112M 0 ($M) • FYE20 IDS at or
Slide 10: Improving Business Outlook
IMPROVING BUSINESS OUTLOOK Given COVID-19 uncertainties, guidance limited to sales volume outlook ● Significant earnings sensitivity to volume volatility ● Will consider reinstating financial guidance in the future when market trends become more clear Improved FY20 sales volume outlook ● Reflecting
Slide 11: Conclusion
CONCLUSION Responding to COVID-19 with speed and agility ● 2Q cash flow strong despite pandemic and disruptive lockdowns in Mexico and Andean ● Strong operating performance Demand recovering as markets reopen Improving business outlook Bold actions to create long-term value Stronger, leaner O-I ente
Slide 12: Financial Appendix
: — Mm BOVeseuesaooanng Sap” “er 18 % FINANCIAL APPENDIX
Slide 13: Historic Pro Forma Excluding ANZ
H ISTO R I C P R OFORM A EXCL UDI NG ANZ $ millions LTM Consolidated O-I Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 June 30, 2020 Net Sales $ 1,638 $ 1,756 $ 1,670 $ 1,628 $ 6,691 $ 1,561 $ 1,418 $ 6,276 Adjusted EBIT (a) 176 208 185 175 744 148 62 570 EBITDA (a) 302 335 312 294 1,243 2
Slide 14: FX Impact on Earnings
F X I M PA C T O N EARNI NGS APPROXIMATE ANNUAL TRANSLATION FX RATES AT KEY POINTS IMPACT ON EPS FROM 10% FX CHANGE AUG 1, AVG AVG 2020 2019 2Q19 EUR $0.07 EUR 1.18 1.12 1.12 MXN $0.01 MXN 22.27 19.32 19.26 BRL $0.01 BRL 5.22 3.95 3.91 COP $0.01 COP 3,733 3,299 3,270 AUD $0.00 AUD 0.71 0.70 0.70 14
Slide 15: Non-GAAP Financial Measures
N O N -GAAP F I N A N CIAL M EASURES 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 pres
Slide 16: Reconciliation for Adjusted Earnings
RE C O NCI L I ATI O N F O R A DJ USTED EARNI NGS Three months ended Six months ended Unaudited June 30 June 30 2020 2019 2020 2019 Earnings (loss) from continuing operations attributable to the Company $ (101) $ 66 $ (51) $ 145 Items impacting other selling and administrative expense: Restructuring
Slide 17: Reconciliation to Earnings from Continuing Operations Before Income Taxes
RECONCILIATION TO EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES Three months ended Six months ended Unaudited June 30 June 30 2020 2019 2020 2019 Net sales: Americas (d): $ 724 $ 934 $ 1,555 $ 1,815 Europe 555 650 1,132 1,246 Asia Pacific 132 152 277 303 Reportable segment totals 1,411 1,7
Slide 18: 2Q Price, Volume and Currency Impact
2 Q P R I C E , V O L U M E A N D CURRENCY I M PACT O N R E P O R TA BLE S EG M ENT SAL ES Three months ended June 30, Americas Europe Asia Pacific Total Net sales for reportable segments- 2019 $ 934 $ 650 $ 152 $ 1,736 Effects of changing foreign currency rates (a) (66) (15) (7) (88) Price 6 12 18
Slide 19: Reconciliation for Net Debt
R E C O NCI L I ATI O N F O R NET DEBT Dollars in millions March 31, June 30, March 31, June 30, Sept 30, Dec 31, 2020 2020 2019 2019 2019 2019 Total debt $ 6,398 $ 6,507 $ 5,911 $ 6,331 $ 5,888 $ 5,559 Cash and cash equivalnts 891 1,067 326 371 273 551 Net debt (non-GAAP) $ 5,507 $ 5,440 $ 5,585 $
Slide 20: Reconciliation for Adjusted Interest Expense
RE C O NCIL I ATI O N F O R A D J US TED I NT EREST EXPENSE Three Months Ended June 30, June 30, Dollars in millions 2020 2019 Interest Expense, net $ 98 $ 68 Items management considers not representative of ongoing operations (38) (2) Adjusted Interest Expense, net $ 60 $ 66 RE C O NCI LI AT I O N