O-i Glass, Inc. · NYSE:OI
O-i Glass — Q3 2022 Earnings Presentation
24 slides from O-i Glass's earnings presentation, Nov 2, 2022
Slide 1: Third Quarter 2022 Earnings
THIRD QUARTER 2022 EARNINGS NOVEMBER 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. (“O-I” 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 Securities Act
Slide 3: Overview: Achieved Strong Earnings and Delivered on Transformation Initiatives
OV E RV I E W Achieved Strong Earnings and Delivered on Transformation Initiatives STRONG YEAR-OVER-YEAR 3Q22 RESULTS EXCEEDED PRIOR YEAR AND GUIDANCE PERFORMANCE IMPROVEMENT • $0.63 aEPS vs. prior year of $0.58 per share and guidance of $0.55 – $0.60 per share (3Q22 VS 3Q21) • Strong execution acro
Slide 4: Sales Volume Trends: Strong Demand Projected to Continue
S AL E S VO L UM E T R E N DS Strong Demand Projected to Continue SALES VOLUME TREND PROJECTED GLASS GROWTH 2023-2025 (IN TONS, ADJUSTED FOR DIVESTITURES) (SOURCE: EUROMONITOR PER UNIT CONSUMPTION PROJECTIONS 2023-2025) 25% 5.0% Rebound from onset of O-I Reported O-I Incl. JVs Glass All Packaging th
Slide 5: 2022 Key Objectives
2022 KEY OBJECTIVES Delivering on O-I’s Transformation Commitments PRIORITIES 2022 KEY OBJECTIVES PROGRESS MARGIN Higher selling prices offset PY unfav Net Price and 2022 inflation ▲ Fav 3Q22 Net Price, on track to exceed FY22 guidance EXPANSION ≥ $50M margin expansion initiative benefits ▲ > $6
Slide 6: Our Sustainability at a Glance
Excerpts from O-I’s Updated OUR SUSTAINABILITY AT A GLANCE Sustainability Report Available at O-I.com GHG EMISSION REEDUCTION Our Sustainability Scorecard RECYCLING COLLECTION SITES (27 TOTAL): OUR COMMITMENT OUR PERFORMANCE (by 2030) (2021) Reduce GHG emissions 25% 13.5% GHG emission reduction 9 Op
Slide 7: 3Q22 Results vs. 3Q21
3Q22 RESULTS VS. 3Q21 Earnings Improved from PY and Exceeded Guidance EARNINGS EXCEEDED PRIOR YEAR RESULTS SEGMENT AMERICAS EUROPE OPERATING • Favorable net price, sales volume and operating performance ($M Except aEPS and Margins) SEGMENT SEGMENT PROFIT1 aEPS 3Q21 AS REPORTED $133 $110 $243 $0.58 •
Slide 8: FY Financial Priorities: Higher FCF and Lower Financial Leverage
F Y 2 2 F I N AN CIAL P R I O RITIE S HIGHER FCF 1 AND LOWER FINANCIAL LEVERAGE 2,3 Lowest Total Financial Leverage Since 2Q15 (Pre O-I MX Acquisition) FCF $400 GUIDING PRINCIPLE 2022 PROGRESS 205 213 264 $200 112 117 90 127 101 OPTIMIZE CASH FLOW $0 ($M) Generate ≥ $200M FCF and $400M aFCF in 2022
Slide 9: 2022 Business Outlook
2 0 2 2 BUS I N E S S O UT L O O K FY22 Earnings Expected to Be at High-End of Guidance Range EARNINGS OUTLOOK (aEPS) YTD 4Q FY 2021 Actual $1.47 $0.36 $1.83 4Q22: IMPROVED OUTLOOK FX1 (0.10) (0.05) (0.15) Divestitures2 (0.05) (0.02) (0.07) • aEPS: $0.28 – $0.33/sh (prior guidance $0.20 – $0.30/sh)
Slide 10: Preliminary Themes for 2023
P R E L IMINARY T H E M E S F O R 2 0 2 3 Expect Continued Progress in 2023 PRELIMINARY THEMES FOR 2023 aEPS FY23 VS FY22 • Favorable net price 2022F $2.20-$2.25 • Flat or slight sales volume growth FX1 (0.14) – New capacity enables growth partially offset by elevated asset project activity Divestit
Slide 11: Resilience Amid Elevated Macro Volatility
R E S I LIE NCE AM I D E L E VAT E D M AC RO VO L IT ILTY ▲ Improving balance sheet and fair and final resolution of legacy asbestos liabilities ▲ Stable Food/Beverage end markets that are more resilient amid recession cycles (US mega beer 3% of vol) ▲ Oversold positions in Europe and Latin America
Slide 12: Conclusion: Compelling Investment Thesis
CONCLUSION COMPELLING INVESTMENT THESIS STRONG THIRD QUARTER RESULTS DELIVERING ON KEY TRANSFORMATON INITIATIVES IMPROVED FULL-YEAR 2022 BUSINESS OUTLOOK EXPECT CONTINUED PROGRESS IN 2023 RESILIENCE AMID ELEVATED MACRO VOLITITY O-I is aggressively addressing many historic overhangs on the stock and
Slide 13: Appendix
APPENDIX
Slide 14: Our Sustainability Goals
S US TAI N ABILITY AT O - I Our Sustainability Goals It is our vision to become the most sustainable producer of the most sustainable rigid packaging. 5 0 % TA R G E T S U P P LY C H A I N S U S TA I N A B I L I T Y Increase recycled content to 50% average by 2030. O-I is taking a Achieve sustainabi
Slide 15: 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 Oct 31, AVG AVG 2022 3Q22 3Q21 EUR 0.19 EUR 1.00 1.00 1.18 MXN 0.05 MXN 19.82 20.19 20.16 BRL 0.02 BRL 5.29 5.23 5.23 COP 0.01 COP 4,824 4,434 3,829 15
Slide 16: 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 17: Reconciliation to Constant Currency Net Sales
R E C O N C I L I AT I O N TO C O N S TA N T C U R R E N C Y N E T S A L E S 17
Slide 18: Reconciliation to Adjusted Earnings
R E C O N C I L I AT I O N TO A D J U S T E D E A R N I N G S 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 quarter and year ending December 31, 2022, or the year ending December 31,
Slide 19: Segment Reconciliations
S E G M E N T R E C O N CILIAT IONS 3Q PRICE,VOLUME AND CURRENCY IMPACT ON REPORTABLE SEGMENT SALES 3Q PRICE, SALES VOLUME, OPERATING COSTS AND CURRENCY IMPACT ON REPORTABLE SEGMENT OPERATING PROFIT 19
Slide 20: Segment Reconciliations
S E G M E N T R E C O N CILIAT IONS SEPTEMBER YTD PRICE,VOLUME AND CURRENCY IMPACT ON REPORTABLE SEGMENT SALES SEPTEMBER YTD PRICE, SALES VOLUME, OPERATING COSTS AND CURRENCY IMPACT ON REPORTABLE SEGMENT OPERATING PROFIT 20
Slide 21: Reconciliation for Segment Operating Profit
R E C O NCILIATIO N F O R S E G M E N T O P E R AT ING P RO F IT 21
Slide 22: Reconciliation for Adjusted Effective Tax Rate
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 F F E C T I V E TA X R AT E The Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP measure, adjusted effective tax rate, for the quarter ending December 31, 2022 or the year ending December 31, 2022, to its mo
Slide 23: Reconciliation to Total Financial Leverage
R E C O N C I L I AT I O N TO TOTA L F I N A N C I A L L E V E R AG E For all periods after the third quarter of 2022, the Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP measure, total debt less cash plus unfunded pension liability plus the asbestos liabil
Slide 24: Additional Reconciliations
AD D I TIO NAL R E C O NCILIATIO NS RECONCILIATION TO FCF & ADJUSTED FCF RECONCILIATION FOR ADJUSTED FCF – ADJUSTED EBITDA CONVERSION 24