O-i Glass, Inc. · NYSE:OI
O-i Glass — Owens Illinois — Bank of America Merrill Lynch 2018 Basic Materials Conference
18 slides from O-i Glass's conference presentation, Feb 28, 2018
Slide 1: Bank of America Merrill Lynch 2018 Basic Materials Conference
Bank of America Merrill lynch 2018 basic materials conference Jan Bertsch, CFO February 28, 2018 Owens-Illinois
Slide 2: Safe harbor comments
Safe harbor comments 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 t
Slide 3: Why invest in O-I?
Why invest in O-I? Investment Thesis Leading global franchise in glass containers Well positioned to develop new business and modestly grow organic volumes Secular trends support glass container growth Attractive opportunities in high value segments Evident impact to top and bottom line from investm
Slide 4: Strong business results and non-operational gains
4 Strong business results and non-operational gains 2018 guidance in line with Investor Day commitments >10% CAGR in adjusted EPS over three year period Adjusted FCF of ~$400M Balanced capital allocation ~12% CAGR $2.85 $2.75 $393 VAT refund ~$400 Strong Business Performance 2016 2017 ~1% organic vo
Slide 5: Sustainable value creation
5 Sustainable value creation CONSUMER TRENDS & REGIONAL DYNAMICS CAPABILITY BUILDING STRATEGIC INVESTMENTS PEOPLE & CULTURE MULTIPLIER x + + = Ensuring success for shareholders, customers & employees HIGHER EARNINGS & CASH FLOW
Slide 6: Rising operating profit and margin in 2018 and beyond
Rising operating profit and margin in 2018 and beyond 6 Continuing, solid end-consumer and regional trends AMERICAS EUROPE Trends Non-beer segments continue to grow Ongoing U.S. mainstream beer trends; strong performance in imports Solid demand growth in Mexico Double-digit growth in Brazil in 1H18
Slide 7: Capability building drives long-term shareholder value through strategic initiatives
7 Capability building drives long-term shareholder value through strategic initiatives Leveraged by Integrated Business Planning that will transform the way we work Continually evaluate business projections with a 2 to 3 year horizon Systematically integrated demand, supply, product and portfolio ch
Slide 8: Clear investment priorities
Clear investment priorities 8 Top priority for cash flow from operations Invest in the business Capital investments drive top and bottom line via asset reliability, flexibility and automation, coupled with product/process innovation Strategic investments (growth via M&A) drive long-term value Shift
Slide 9: O-I transformation driving higher earnings and cash flow into the future
9 O-I transformation driving higher earnings and cash flow into the future Investor Day: 3-year target 2016 2017 2018 expectation Beyond 2018 Adjusted EPS 10% CAGR Exceeded Exceeded Higher Higher YoY Adjusted free cash flow >$400M in 2018 On Track On Track On Track Higher YoY Deleveraging ~3x levera
Slide 10: Appendix
Appendix
Slide 11: Planned investments impact 1Q18, with solid business improvement mid year
Planned investments impact 1Q18, with solid business improvement mid year 11 1 Adjusted EPS excludes items management does not consider representative of ongoing operations. See the appendix of this presentation. 2 Assumes currency rates as of January 31, 2018 continue through the end of 2018. Posit
Slide 12: Rising Adjusted EPS expected in 2018
12 Rising Adjusted EPS expected in 2018 1 Adjusted EPS excludes items management does not consider representative of ongoing operations. See the appendix of this presentation. 2 Assumes currency rates as of January 31, 2018 continue through the end of 2018. Commercial activities and initiatives driv
Slide 13: Adjusted FCF of ~$400M in 2018 in line with Investor Day
13 Adjusted FCF of ~$400M in 2018 in line with Investor Day Tailwinds Earnings growth Lower inventory levels Lower restructuring payments Headwinds Capex activity of ~$500M, modestly higher than 20171 1 The Company may also reduce capex-related payables by year-end 2018. VAT refund Cash from Continu
Slide 14: Reconciliation to Adjusted Earnings and Constant Currency
Reconciliation to Adjusted Earnings and Constant Currency 14
Slide 15: Reconciliation to Adjusted Earnings and Constant Currency – 1Q 2017
15 Reconciliation to Adjusted Earnings and Constant Currency – 1Q 2017 The reconciliation below describes the items that management considers not representative of ongoing operations. Unaudited Three months ended March 31 2017 49 $ Items impacting other expense, net: Restructuring, asset impairment
Slide 16: Reconciliation to Expected Adjusted Earnings - FY18 and Q1 Forecasts
16 Reconciliation to Expected Adjusted Earnings - FY18 and 1Q18 Forecasts Unaudited Low End of Guidance Range High End of Guidance Range Low End of Guidance Range High End of Guidance Range 90 $ to 99 $ 454 $ to 470 $ Items management considers not representative of ongoing operations: None (a) Tota
Slide 17: Reconciliation to Adjusted Free Cash Flow
Reconciliation to Adjusted Free Cash Flow Note: Management defines adjusted free cash flow as cash provided by continuing operating activities less additions to property, plant and equipment plus asbestos-related payments (all components as determined in accordance with GAAP). 17 $ Millions Unaudite
Slide 18: Impact from currency rates
Impact from currency rates Approximate annual translation impact on EPS from 10% FX change Euro $0.08 Mexican peso $0.04 Brazilian real $0.03 Colombian peso $0.01 AU & NZ dollar $0.04 18
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