O-i Glass, Inc. · NYSE:OI
O-i Glass — BofA Securities 2022 Global Agriculture and Materials Conference
23 slides from O-i Glass's conference presentation, Mar 2, 2022
Slide 1: 1Q22 Capital Markets Presentation
1Q22 CAPITAL MARKETS PRESENTATION MARCH 2, 2022
Slide 2: Safe Harbor Comments
SAFE HARBOR COMMENTS FORWARD-LOOKING STATEMENTS This presentation contains “forward-looking” statements related to O-I Glass, Inc. (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 Securities Act of 1933,
Slide 3: At A Glance
AT A G L A N C E DIVERSE BROAD PRODUCT PORTFOLIO CUSTOMER BASE 29% beer 20% wine 17% food 17% spirits 17% NAB 6,000+ direct customers GLASS IS THE MOST MAGMA SUSTAINABLE PACKAGE reimagines glass making to all natural, endlessly recyclable, support customer aspirations NEVER trash and enable profitab
Slide 4: O-I Strategy To Enhance Stakeholder Value
BUILDING THE PATH TO YES! O-I STRATEGY TO ENHANCE STAKEHOLDER VALUE FAVORABLE ENHANCE TRANSFORMATION MAGMA MARKET VALUE YES! TO YES! TO YES! TO YES! TO PROFITABLE GROWTH AN AGILE & RESILIENT COMPANY A NEW PARADIGM FOR GLASS ENHANCE VALUE Mega trends favor glass Simple, agile, effective, adaptable Fl
Slide 5: Market Evolution Is Favorable To Glass
MARKET EVOLUTION IS FAVORABLE TO GLASS WELLNESS POSITIVE Glass is all natural and inert – it will not contaminate the product content and is the only package “generally recognized as safe” by the U.S. Food and Drug Administration PREMIUM & DIFFERENTIATED The appearance of a glass container alone can
Slide 6: Glass Is An Attractive Market
G L AS S I S AN AT T R AC TIV E M AR K E T Glass is expected to grow 2.0% - 3.5% CAGR in key markets as favorable trends accelerate. O-I VOLUME GROWTH PROJECTED PACKAGING GROWTH (IN TONS, ADJUSTED FOR DIVESTITURES) (2022-2024) 8% 5.0% 6.2% GLASS VOLUME GROWTH 5 Year CAGR 6% O-I Consolidated: 0.0% 5.
Slide 7: Substantial Progress Transforming O-I
S UB S TAN T IAL P RO G RE S S T R AN S F O RM ING O- I TRANSFORM AT IO N OBJECTIV ES PROGRESS 1. SIMPLE, AGILE, EFFECTIVE & ADAPTABLE ORGANIZATION INTEGRATED BUSINESS PLANNING ALIGNED WITH STRATEGY STREAMLINED ORGANIZATION REBUILT CRITICAL CAPABILITIES – COMMERCIAL, R&D, ESG STRONG COMMERCIAL PIPEL
Slide 8: MAGMA's Potential Benefits
M AG M A’ S P OT E N T IAL B E N E F I TS O-I expects MAGMA will significantly enhance O-I’s capabilities and competitive position. OBJECT IV ES MAGMA GEN 3 1 IMPROV EM ENT VS HERITAGE (2025+ ) 1. FLEXIBLE Achieve attractive economics at 15% lower utilization rate 2. SCALABLE New melter reduces capa
Slide 9: Expanding In Premium Markets With Premium Technology
1 % – 2 % C AG R P R O F I TA B L E VO L U M E G R OW T H 1 2 0 2 2 - 2 0 2 4 CAN Premium Beer UK Spirits (1 Line Extension) (up to 2 MAGMA Lines) EXPAND I NG IN PREMIUM MARKETS US Spirits ACROSS PREMIUM CATEGORIES (up to 3 MAGMA lines) WITH PREMIUM TECHNOLOGY COLOMBIA Beer, NAB Investing up to $680
Slide 10: Capital Redeployment To Fund Growth
CAPITAL REDEPLOYMENT TO FUND GROWTH $1.5B portfolio optimization program to fund MAGMA expansion and improve ROIC. PORTFOLIO OPTIMIZATION PROGRAM (2019-2024) $1,800 $1,600 1,500 OPTIMIZE IMPROVE BUSINESS $1,400 CAPITAL PORTFOLIO STRUCTURE $1,200 > 15% IRR ~ 0.7x lower $1,000 Leverage Ratio ($M) 810
Slide 11: 2022 Key Strategic Objectives
2022 KEY STRATEGIC OBJECTIVES Accelerating O-I’s Transformation HORIZON 1 PRIORITIES (2022-2024) 2022 KEY OBJECTIVES MARGIN EXPANSION Higher selling prices offset PY unfav Net Price and 2022 inflation ≥ $50M margin expansion initiative benefits PROFITABLE GROWTH Substantially complete Colombia
Slide 12: FY22 Financial Priorities
F Y 2 2 F I N AN CIAL P R I O RITIE S REDUCING FINANCIAL LEVERAGE 2 Fund Expansion, Improve Balance Sheet 6.0 2022 FINANCIAL PRINCIPLES AND OBJECTIVES 5.0 Optimize aFCF1 • Generate ≥ $350M aFCF in 2022; 25% – 30% aFCF/EBITDA conversion 4.0 High 3s Complete Portfolio Optimization Program to Fund MAGM
Slide 13: Business Outlook
BUS I N E S S O UT L O O K 1Q22 FY22 FY24 Outlook as of Feb 2, 2022 (no update) Outlook as of Feb 2 2022 (no update) Targets from September 28, 2021 I-Day • Volume1 Growth: up to 2% • Volume1 Growth: up to 1% • Volume1: 1-2% CAGR 2022-2024 • Favorable Net Price • Favorable Net Price • aEPS2: $2.20-$
Slide 14: ESG Progress & Update
E S G P RO G R E SS & UP DAT E INITIATIVES AND ACCOMPLISHMENTS • Doubled ESG Initiatives • Elevated Goals • Enhanced Governance • Created Global Leadership Network • Sustainability Report Published • SBTi Approved Target • Cradle-to-Cradle Certified • CEO Action for Diversity & Inclusion Signatory P
Slide 15: O-I ESG Goals
O - I E S G G OAL S Increase recycled content to 50% Reduce the amount of natural average by 2030. O-I is taking a resource used and reduce the We are committed to reducing tailored approach to increase generation of waste by reuse our global water usage 25% by recycled content rates across its and
Slide 16: Conclusion: O-I Is An Attractive Investment
CONCLUSION: O-I IS AN ATTRACTIVE INVESTMENT MARKET, TRANSFORMATION MAGMA RESOLUTION OF OPPORTUNITY FOR INNOVATION & IMPROVES MARGINS, WILL UNLOCK LEGACY LIABILITIES HIGHER VALUATION ESG LEADER EARNINGS & ROIC SIGNIFICANT REDUCES RISK & THROUGH SOLID IN THE ATTRACTIVE GROWTH IMPROVES CASH EXECUTION A
Slide 17: Appendix
APPENDIX
Slide 18: Paddock Chapter 11 – Progress And Update
PAD D OCK C H AP TE R 1 1 – P RO G RE S S AN D UP DAT E 1 COMPLETED/CURRENT • Phase 1: Paddock files for bankruptcy protection in Delaware and obtains initial relief • Phase II: Paddock informally negotiates with the Asbestos Claimants’ Committee and Future Claimants Representative, fiduciaries for
Slide 19: Segment FX Impact On Earnings
S E G M E N T F X I M PACT O N E AR N I N GS APPROXIMATE ANNUAL IMPACT ON FX RATES AT KEY POINTS EPS FROM 10% FX CHANGE Jan 28, Dec 31, AVG Dec 31, AVG 2022 2021 4Q21 2020 4Q20 EUR 0.13 EUR 1.12 1.13 1.14 1.23 1.20 MXN 0.04 MXN 20.75 20.46 20.85 19.89 20.44 BRL 0.04 BRL 5.42 5.57 5.61 5.19 5.43 COP
Slide 20: Non-GAAP Financial Measures
N O N - GAAP F I N AN CIAL M E AS UR E S 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
Slide 21: Reconciliation For Adjusted EBITDA Conversion
R E C O N C I L I AT I O N F O R A D J U S T E D E B I T DA C O N V E R S I O N Year Ended Year Ended Dec 31, 2021 Dec 31, 2020 Earnings from continuing operations before income taxes $ 332 $ 353 Interest expense, net (216) (265) Interest income 7 5 Earnings before interest and taxes (non GAAP) $ 55
Slide 22: Additional Reconciliations
AD D I TIO NAL R E C O NCILIATIO NS RECONCILIATION TO NET DEBT Dec 31, Dec 31, Dec 31, 2021 2020 2019 Total debt $ 4,825 $ 5,142 $ 5,559 Cash and cash equivalents 725 563 551 Net Debt $ 4,100 $ 4,579 $ 5,008 RECONCILIATION TO FREE CASH FLOW & ADJUSTED FREE CASH FLOW Year Ended December 31, Forecaste
Slide 23: Reconciliation To Financial Leverage
R E C O N C I L I AT I O N TO F I N A N C I A L L E V E R AG E $ millions 2019 2020 2021 Earnings (loss) from continuing operations $ (379) $ 264 $ 165 Interest expense (net) 311 265 $ 216 Interest income 9 5 $ 7 Provision for income taxes 118 89 $ 167 Depreciation 390 369 $ 356 Amortization of inta
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