O-i Glass, Inc. · NYSE:OI
O-i Glass — Q4 2022 Earnings Presentation
24 slides from O-i Glass's earnings presentation, Jan 31, 2023
Slide 1: Full Year and Fourth Quarter 2022 Earnings
FULL YEAR AND FOURTH QUARTER 2022 EARNINGS JANUARY 31, 2023
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: Results Exceeded Guidance and O-I Achieved All 2022 Commitments
OV E RV I E W Results Exceeded Guidance and O-I Achieved All 2022 Commitments IMPROVED EARNINGS 3.50 FY22 EARNINGS EXCEEDED GUIDANCE AND PRIOR YEAR • Strong execution across key business levers: net price, volume, operations and margin expansion initiatives 3.00 > $2.50 2021 2022 GUIDE 2022 Full Yea
Slide 4: Sales Volume Trends: Strong Demand Projected Amid Capacity Constraints
S AL E S VO L UM E T R E N DS Strong Demand Projected Amid Capacity Constraints O-I VOLUME GROWTH PROJECTED GLASS GROWTH 2023-2025 (IN TONS, ADJUSTED FOR DIVESTITURES) (SOURCE: EUROMONITOR PER UNIT CONSUMPTION PROJECTIONS) 8% 5.0% 6.2% Strong demand projected. Glass All Packaging 6% New capacity wil
Slide 5: 2022 Strategic Objectives
2022 STRATEGIC OBJECTIVES O-I Achieved Key 2022 Strategic Objectives PRIORITIES 2022 KEY OBJECTIVES 2022 PROGRESS MARGIN Higher selling prices offset PY unfav Net Price and 2022 inflation $231M favorable Net Price, exceeding FY22 guidance EXPANSION ≥ $50M margin expansion initiative benefits
Slide 6: 2023 Strategic Objectives
2023 STRATEGIC OBJECTIVES Ambitious and Achievable Objectives to Advance O-I’s Strategy in 2023 PRIORITIES 2023 KEY OBJECTIVES ≥ $150M net price realization (excluding margin expansion initiative benefits) MARGIN EXPANSION ≥ $100M margin expansion initiative benefits (reported in net price and o
Slide 7: First MAGMA Greenfield Commissioning Mid-2024
F I R S T M AG M A G R E E N F IE LD C O M M I SS IO NING M I D -20 24 First MAGMA Greenfield in Bowling Green, KY Will be a Showcase Plant MAGMA MELTER CUSTOMER ENGAGEMENT CENTER Small, Incremental Growth, Flexibility, Sustainability Customer Intimacy, Collaborative Innovation MODULAR BATCH SYSTEM
Slide 8: Results: Performance Improved Across Several Key Financial Measures
2 0 2 2 R E S ULT S Performance Improved Across Several Key Financial Measures STRONG YEAR-OVER-YEAR PERFORMANCE IMPROVEMENT FY22 vs FY21 4Q22 vs 4Q21 (FY22 VS FY21) SEGMENT SEGMENT AMERICAS EUROPE OPERATING AMERICAS EUROPE OPERATING SEGMENT SEGMENT PROFIT1 aEPS SEGMENT SEGMENT PROFIT1 aEPS ▲ 8% Net
Slide 9: 2022 Cash Flow and Capital Structure
2022 CASH FLOW AND CAPITAL STRUCTURE Improving Adjusted FCF and Lower Total Financial Leverage FREE CASH FLOW TOTAL FINANCIAL LEVERAGE 600 539 6.0 5.5x 0.5 500 5.0 426 0.4 4.4x 398 (Leverage Ratio) 400 4.0 0.6 378 3.4x 311 0.1 0.1 ($M) 300 282 3.0 236 4.6 200 146 2.0 3.7 3.3 100 1.0 0 0.0 2020 2021
Slide 10: Outlook: Momentum Drives Continued Performance Improvement
2 0 2 3 O UT L O O K EXPECTED aEPS IMPROVEMENT Momentum Drives Continued Performance Improvement (aEPS) 1Q23 VS 1Q22 FY23 VS FY22 PRIOR PERIOD $0.56 $2.30 FX2 (0.04) 0.03 2022 2023F Divestitures3 (0.01) (0.01) Sales Volume Growth (Tons) ▲1.1% Flat to ▲1% Interest funding Paddock trust (0.04) (0.10)
Slide 11: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES #1 #2 #3 IMPROVE FUND RETURN CAPITAL PROFITABLE VALUE TO STRUCTURE GROWTH SHAREHOLDERS ▲ < 3.0x leverage (2023) ▲ $630M expansion program (2022-2024) ▲ Anti-dilutive repurchases ▲ Glide path to < 2.5x leverage ▲ Continued portfolio optimization ▲ Evaluate additional rep
Slide 12: Conclusion
CONCLUSION COMPELLING INVESTMENT THESIS STRONG 2022 RESULTS ACHIEVED KEY 2022 STRATEGIC OBJECTIVES AMBITIOUS STRATEGIC OBJECTIVES IN 2023 EXPECT HIGHER RESULTS IN 2023 AND BEYOND 12
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 Jan 30, AVG AVG AVG AVG 2023 4Q22 4Q21 FY22 FY21 EUR 0.25 EUR 1.09 1.03 1.14 1.05 1.18 MXN 0.07 MXN 18.77 19.49 20.85 20.03 20.39 BRL 0.03 BRL 5.12 5.28 5.61 5.14 5.40 COP 0.01 COP
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 18
Slide 19: Segment Reconciliations (4Q)
S E G M E N T R E C O N CILIAT IONS 4Q PRICE,VOLUME AND CURRENCY IMPACT ON REPORTABLE SEGMENT SALES 4Q PRICE, SALES VOLUME, OPERATING COSTS AND CURRENCY IMPACT ON REPORTABLE SEGMENT OPERATING PROFIT 19
Slide 20: Segment Reconciliations (Full Year)
S E G M E N T R E C O N CILIAT IONS FULL YEAR PRICE, VOLUME AND CURRENCY IMPACT ON REPORTABLE SEGMENT SALES FULL YEAR 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 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 22
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 year ending December 31, 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 asbesto
Slide 24: Additional Reconciliations
AD D I TIO NAL R E C O NCILIATIO NS RECONCILIATION FOR ADJUSTED EFFECTIVE TAX RATE The Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP measure, adjusted effective tax rate, for the year ending December 31, 2023, to its most directly comparable GAAP financia