O-i Glass, Inc. · NYSE:OI
O-i Glass — Q3 2024 Earnings Presentation
24 slides from O-i Glass's earnings presentation, Oct 30, 2024
Slide 1: Third Quarter 2024 Earnings
THIRD QUARTER 2024 EARNINGS OCTOBER 30, 2024
Slide 2: Presenters
PRESENTERS Gordon Hardie John Haudrich President and CEO SVP and CFO 2
Slide 3: 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 Securiti
Slide 4: Overview
OVERVIEW WORKING ACROSS THE VALUE CHAIN TO DRIVE A SOLID RECOVERY IN 2025 ADJUSTED EARNINGS PER SHARE (aEPS, diluted) ► LOWER 3Q24 aEPS AS WE OPTIMIZE INVENTORY LEVELS GIVEN SOFTER DEMAND $1.00 $0.80 ► RAPIDLY IMPLEMENTING FIT TO WIN TO IMPROVE PERFORMANCE $0.75 ► RETURN TO MODEST SALES VOLUME GROWT
Slide 5: Value Creation Roadmap
VALUE CREATION ROADMAP IMPROVEMENT DRIVEN BY ‘SELF HELP’ RATHER THAN MARKET RECOVERY ECONOMIC PROFIT MINDSET CAPTURING MORE OF THE ECONOMIC PROFIT PRELIMINARY 2027 TARGETS¹ IN THE PACKAGING VALUE CHAIN Horizon 3 (2028+) STRATEGIC Sustainable aEBITDA ≥ $1.45B OPTIONALITY Horizon 2 BUILD VALUE FCF ≥ 5
Slide 6: Horizon 1: Fit to Win
HORIZON 1: FIT TO WIN EXPECT ≥ $175M OF SAVINGS IN 2025 OF ≥ $300 MILLION PHASE A TARGET SAVINGS BY 2027 BENEFITS MILESTONES 2027 Target: >$300M SAVINGS • Rapidly reducing excess inventory: – Curtailed 18% of capacity in 3Q24; IDS down 17% to 59 (low 50s by FYE24) PHASE A • Initial Network Optimizat
Slide 7: Return to Modest Sales Volume Growth
44:51 RETURN TO MODEST SALES VOLUME GROWTH 3Q24 SHIPMENTS UP 2% YOY SUPPORTED BY GROWTH IN MOST GEOGRAPHIES Glass Demand Trends 3Q24 Category Trends YoY Change in O-I Shipments (in tons)¹ YoY Change in O-I Shipments (in tons)¹ and Change in Consumer Consumption of Products in Glass Packaging2 20% 15
Slide 8: Category Consumption Trends
44:51 CATEGORY CONSUMPTION TRENDS DRIVE PORTFOLIO MOMENTUM TOWARDS MORE PROFITABLE, GROWING, AND RESILIENT PREMIUM CATEGORIES Long-term Glass Consumption Trends By Category MAINSTREAM PREMIUM 700 700 Mainstream categories are 600 Premium categories have good growth, 600 generally stable with stronge
Slide 9: 3Q24: Adjusted Earnings Down from PY
3Q24: ADJUSTED EARNINGS DOWN FROM PY LOWER NET PRICE AND HIGHER OPERATING COSTS PARTIALLY OFFSET BY VOLUME GROWTH aEPS +2% in Tons (0.65) Lower Production 0.19 Cost Reduction (0.14) Higher Tax Rate (0.05) Higher Interest Exp. 0.14 Lower Corp. Retained 9 (1) Non-operating includes retained corporate
Slide 10: 3Q24: Segment Performance
3Q24: SEGMENT PERFORMANCE AMERICAS AND EUROPE DOWN FROM PRIOR YEAR ON LOWER NET PRICE AND HIGHER OPERATING COSTS SEGMENT OPERATING PROFIT +7% in Tons -2% in Tons - 15% production curtailment + Fav. cost management - 21% production curtailment - Lower JV results + Fav. cost management Further details
Slide 11: 2024: Updated Outlook
2024: UPDATED OUTLOOK REVISED GUIDANCE ON LOWER VOLUME, HIGHER TAX RATE AND CASH ITEMS CHANGE IN FY24 aEPS GUIDANCE CHANGE IN FY24 FCF GUIDANCE ($M) Further details included in the appendix $1.50 $125 50 - 100 $100 1.00 - $1.25 $1.25 $75 $50 $25 $1.00 $0 1,100 – 1,125 vs. $0.70 - $0.80 1,150 – 1,200
Slide 12: 2025: Early View on Key Business Levers
2025: EARLY VIEW ON KEY BUSINESS LEVERS FIT TO WIN TO DRIVE HIGHER 2025 EARNINGS AND CASH FLOW BUSINESS DRIVER 2025 VS 2024 COMMENTS (Fav / Unfav) ADJUSTED EPS • Higher adjusted earnings from Fit To Win initiatives Sales Volume • Assume flat / down demand until clear signs of improved consumption Ne
Slide 13: Conclusion
CONCLUSION KEY CATALYSTS ► Execute FIT TO WIN Program ► Drive Capital Discipline 1 Setting The Stage For A Solid Recovery In 2025 & Beyond ► Delivery Profitable Growth 2 Rapidly Implementing Initial Fit To Win Priorities PRELIMINARY 2027 TARGETS¹ 3 Determined to Improve Company Value ► Sustainable a
Slide 14: Appendix
APPENDIX
Slide 15: Summary Financial Results: 3Q24 vs 3Q23
SUMMARY FINANCIAL RESULTS: 3Q24 VS 3Q23 NET SALES SEGMENT OPERATING PROFIT $M except EPS and % AMERICAS EUROPE CORP TOTAL AMERICAS EUROPE TOTAL aEPS 3Q23 $ 948 $ 766 $ 29 $1,743 $116 $185 $301 $0.80 % Margin 12.2% 24.2% 17.6% FX (46) 16 - (30) (1) 3 2 0.01 SUBTOTAL $ 902 $782 $29 $1,713 $115 $188 $3
Slide 16: Updated Guidance Details
UPDATED GUIDANCE DETAILS FY24 GUIDANCE CURRENT PRIOR (2Q24) Sales Vol Growth (Tons) ▼ LSD/MSD Flat to ▼ LSD APPROX. EARNINGS SENSITIVITY TO 1% CHANGE IN VOLUME • ~ $0.07/sh for 1% change in sales volume Production Vol (Tons) ~ ▼8% ~ ▼7% • ~ $0.13/sh for 1% change in production volume • ~ $0.20/sh fo
Slide 17: Our Sustainability Goals
OUR SUSTAINABILITY GOALS ZERO INJURIES SUPPLY CHAIN SUSTAINABILITY As part of our journey toward zero injuries, we are Achieve sustainability balance, together, by aligning committed to a 50% improvement of our Total our supply chain with our 2030 sustainability vision Recordable Incident Rate (TRIR
Slide 18: Non-GAAP Financial Measures
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 that its presentation
Slide 19: Reconciliation to Adjusted Earnings
RECONCILIATION TO ADJUSTED EARNINGS The Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP measure, adjusted earnings and adjusted earnings per share, for the periods ending after September 30, 2024 to its most directly comparable GAAP financial measure, net e
Slide 20: Segment Reconciliations
SEGMENT RECONCILIATIONS 3Q24 PRICE, SALES VOLUME AND CURRENCY IMPACT ON REPORTABLE SEGMENT SALES 3Q24 PRICE, SALES VOLUME, OPERATING COSTS AND CURRENCY IMPACT ON REPORTABLE SEGMENT OPERATING PROFIT 20 (a) Currency effect on net sales and segment operating profit determined by using 2024 foreign curr
Slide 21: Segment Reconciliations
SEGMENT RECONCILIATIONS YTD 3Q24 PRICE, SALES VOLUME AND CURRENCY IMPACT ON REPORTABLE SEGMENT SALES YTD 3Q24 PRICE, SALES VOLUME, OPERATING COSTS AND CURRENCY IMPACT ON REPORTABLE SEGMENT OPERATING PROFIT 21 (a) Currency effect on net sales and segment operating profit determined by using 2024 fore
Slide 22: Reconciliation for Segment Operating Profit
RECONCILIATION FOR SEGMENT OPERATING PROFIT 22
Slide 23: Reconciliation to Free Cash Flow
RECONCILIATION TO FREE CASH FLOW The Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP measures, free cash flow, for all periods after December 31, 2024 to its most directly comparable U.S. GAAP financial measure, cash provided by operating activities, withou
Slide 24: Additional Reconciliations
ADDITIONAL RECONCILIATIONS RECONCILIATION TO NET DEBT LEVERAGE RATIO For the year ending December 31, 2024, the Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP measure, net debt leverage ratio, which is defined as total debt less cash divided by Adjusted EB