FULL YEAR AND FOURTH QUARTER 2022 EARNINGS
JANUARY 31, 2023
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 Securities Act of 1933, as amended. Forward-looking statements reflect the company's current expectations and projections about future events at the time, and thus involve uncertainty and risk. The words "believe," "expect," "anticipate," "will," "could," "would," "should," "may," "plan," "estimate," "intend," "predict," "potential," "continue," and the negatives of these words and other similar expressions generally identify forward-looking statements.
It is possible that the Company's future financial performance may differ from expectations due to a variety of factors including, but not limited to the following: (1) the general political, economic and competitive conditions in markets and countries where the Company has operations, including uncertainties related to economic and social conditions, disruptions in the supply chain, competitive pricing pressures, inflation or deflation, changes in tax rates and laws, war, civil disturbance or acts of terrorism, natural disasters, and weather, (2) cost and availability of raw materials, labor, energy and transportation (including impacts related to the current conflict between Russia and Ukraine and disruptions in supply of raw materials caused by transportation delays), (3) the impact of the COVID-19 pandemic and the various governmental, industry and consumer actions related thereto, (4) competitive pressures, consumer preferences for alternative forms of packaging or consolidation among competitors and customers, (5) the Company's ability to improve its glass melting technology, known as the MAGMA program, and implement it within the timeframe expected, (6) unanticipated operational disruptions, including higher capital spending, (7) the failure of the Company's joint venture partners to meet their obligations or commit additional capital to the joint venture, (8) the Company's ability to manage its cost structure, including its success in implementing restructuring or other plans aimed at improving the Company's operating efficiency and working capital management, and achieving cost savings, (9) the Company's ability to acquire or divest businesses, acquire and expand plants, integrate operations of acquired businesses and achieve expected benefits from acquisitions, divestitures or expansions, (10) the Company's ability to generate sufficient future cash flows to ensure the Company's goodwill is not impaired, (11) the Company's ability to achieve its strategic plan, (12) unanticipated expenditures with respect to data privacy, environmental, safety and health laws, (13) the ability of the Company and the third parties on which it relies for information technology system support to prevent and detect security breaches related to cybersecurity and data privacy, (14) changes in capital availability or cost, including interest rate fluctuations and the ability of the Company to refinance debt on favorable terms, (15) foreign currency fluctuations relative to the U.S. dollar, (16) changes in tax laws or U.S. trade policies, (17) risks related to recycling and recycled content laws and regulations, (18) risks related to climate-change and air emissions, including related laws or regulations and increased ESG scrutiny and changing expectations from stakeholders regulations and the other risk factors discussed in the company's filings with the Securities and Exchange Commission.
It is not possible to foresee or identify all such factors. Any forward-looking statements in this document are based on certain assumptions and analyses made by the company in light of its experience and perception of historical trends, current conditions, expected future developments, and other factors it believes are appropriate in the circumstances. Forward-looking statements are not a guarantee of future performance and actual results or developments may differ materially from expectations. While the company continually reviews trends and uncertainties affecting the company's results or operations and financial condition, the company does not assume any obligation to update or supplement any particular forward-looking statements contained in this document.
IMPROVED EARNINGS
3.50 | |||
3.00 | > $2.50 | ||
2.50 | 2.30 | ||
2.00 | 1.83 | ||
aEPS | |||
1.50 | |||
1.22 | |||
1.00 | |||
0.50 | |||
0.00 | |||
2020 | 2021 | 2022 | 2023 |
Guidance |
OVERVIEW
Results Exceeded Guidance and O-I Achieved All 2022 Commitments
FY22 EARNINGS EXCEEDED GUIDANCE AND PRIOR YEAR
- Strong execution across key business levers: net price, volume, operations and margin expansion initiatives
2021 | 2022 GUIDE | 2022 | |||
Full Year | aEPS | $1.83 | $2.20 - $2.25 | $2.30 | |
aFCF ($M) | $378 | ≥ $400 | $426 | ||
FCF ($M) | $282 | ≥ $200 | $236 | ||
4Q | aEPS | $0.36 | $0.28 - $0.33 | $0.38 | |
ACHIEVED KEY 2022 STRATEGIC OBJECTIVES
- Expanded segment operating profit margins by 110 basis points
- Advanced key strategic initiatives including capacity expansion projects
- Improved structure: Paddock resolution, completion of portfolio optimization program and reduced debt
EXPECT HIGHER RESULTS IN 2023 AND BEYOND
- 2023 guidance: >$2.50 aEPS, ≥ $450M aFCF and ≥ $150M FCF
- Established ambitious key objectives to advance O-I's strategy in 2023
SALES VOLUME TRENDS
Strong Demand Projected Amid Capacity Constraints
8%
6%
4%
2%
0%
-2%
-4%
-6%
4
O-I VOLUME GROWTH
(IN TONS, ADJUSTED FOR DIVESTITURES)
6.2% | Strong demand projected. | ||||||||||||||||||
New capacity | will enable higher | ||||||||||||||||||
5.3% | shipments while being tempered | ||||||||||||||||||
by record low inventory and | |||||||||||||||||||
normalization of asset | |||||||||||||||||||
maintenance projects as supply | |||||||||||||||||||
chain issues | begin to ease. | ||||||||||||||||||
1.8% | 1.5% | Up to | |||||||||||||||||
0.6% | 0.8% | 1.1%1.4% | ▲1.0% | ||||||||||||||||
-0.4% | |||||||||||||||||||
-1.4% | |||||||||||||||||||
-3.0% | |||||||||||||||||||
-4.0% | |||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023F | |||||||||||||
O-I CONSOLIDATED | O-I PLUS STRATEGIC JVs | ||||||||||||||||||
PROJECTED GLASS GROWTH 2023-2025
(SOURCE: EUROMONITOR PER UNIT CONSUMPTION PROJECTIONS)
5.0% | |||||||
Glass | All Packaging | ||||||
4.0% | 3.8% | ||||||
3.5% | |||||||
2025 | 3.0% | ||||||
2023 - | 2.2% | ||||||
CAGR | 2.0% | 1.9% | |||||
1.7% | 1.7% | ||||||
1.0% | |||||||
0.0%
LatAm | Europe | North America |
Strongest Glass Fundamentals in 20+Years
2022 STRATEGIC OBJECTIVES
O-I Achieved Key 2022 Strategic Objectives
PRIORITIES | 2022 KEY OBJECTIVES | 2022 PROGRESS |
MARGIN EXPANSION
- Higher selling prices offset PY unfav Net Price and 2022 inflation
- ≥ $50M margin expansion initiative benefits
- $231M favorable Net Price, exceeding FY22 guidance
- $70M initiative benefits, exceeding FY22 target
PROFITABLE | Substantially complete Colombia and Canada expansion | Phase 1 of Canada expansion operating; Colombia expansion tracking for 2Q23 |
GROWTH | Initiate Peru and Brazil expansion | Initiated Peru, Brazil, and Scotland expansion as well as US MAGMA greenfield |
MAGMA DEVELOPMENT
- Finalize Gen 1 optimization and complete Gen 2 pilot validation
- Advance Gen 3 and Ultra light-weighting prototypes
- Accelerating MAGMA; 1st US Greenfield in Bowling Green, KY on track for 2024
- Gen 3 / Light-weighting prototypes are proceeding well
ADVANCE ESG AND | Reduce GHG 5-10%,30-35% elect. sourced from renewable energy | 13.5% GHG reduction (2021 vs 2017 baseline); Renewable energy > 31% |
GLASS ADVOCACY | ≥1.5B add'l impressions with Glass Advocacy, expand target categories | 1.16B digital impressions 2022; 100M people engaged avg 11x each |
EXPAND PORTFOLIO OPTIMIZATION
RESOLVE LEGACY LIABILITIES
Complete $1.5B portfolio optimization program | Completed $1.5B portfolio optimization on Aug 4, 2022 |
Receive proceeds prior to significant expansion investment | Received all net proceeds prior to significant expansion CapEx |
Confirm Paddock plan of reorg.; fund $610M 524(g) trust ~ mid-year | 524(g) trust funded as of July 18, 2022 |
Continue to de-risk pension liabilities in line with 2024 target | Continue to advance pension de-risking actions |
5
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O-I Glass Inc. published this content on 31 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 January 2023 21:47:09 UTC.