FOR IMMEDIATE RELEASE
O-I Glass, Inc. (“O-I”) (NYSE: OI) today
reported financial results for the third quarter ended September
30, 2023.
|
Net Earnings Attributable to the
Company Per Share (Diluted) |
Earnings Before Income
Taxes$M |
3Q23 |
3Q22 |
3Q23 |
3Q22 |
Reported |
$0.32 |
$1.45 |
$82 |
$278 |
|
Adjusted EarningsPer Share
(Diluted) |
Segment Operating Profit$M |
3Q23 |
3Q22 |
3Q23 |
3Q22 |
Non – GAAP |
$0.80(Guidance: $0.68
-$0.73) |
$0.63 |
$301 |
$266 |
“O-I continues to execute well, and third
quarter results exceeded our expectations. Business performance
improved significantly from the prior year period reflecting
favorable net price realization, solid operating results, and
benefits from our ongoing margin expansion initiatives, which more
than offset the impact of lower-than-expected demand. Importantly,
our balance sheet position continued to improve, and we achieved
our 2023 target ahead of plan,” said Andres Lopez, O-I Glass
CEO.
“Demand for glass containers has temporarily
decoupled from consumer consumption patterns primarily due to
significant inventory destocking across the value chain. While we
are not immune to the dynamics our industry is currently facing, we
continue to navigate well through elevated volatility, and we are
taking actions in the near term to best position our company for
the market recovery that we believe will occur in 2024. This focus
aligns with our ongoing efforts to transform the company and create
shareholder value,” concluded Lopez.
Third Quarter 2023
Net sales were $1.74 billion in the third
quarter of 2023, up 3 percent compared to $1.69 billion in the
prior year period primarily due to higher average selling prices as
well as favorable foreign currency translation. Sales volume (in
tons) was down 15 percent from the prior year period. The
lower-than-expected shipment levels were primarily attributed to
elevated inventory destocking across the value chain amid modestly
softer consumer consumption. Earnings before income taxes were $82
million in the third quarter of 2023 compared to $278 million in
the prior year reflecting elevated interest expense and the
unfavorable impact of items management considers not representative
of ongoing operations including a restructuring charge this year
and a one-time gain on a sale leaseback transaction in the prior
year period, partially offset by higher segment operating
profit.
Segment operating profit was $301 million in the
third quarter of 2023, up 13 percent compared to $266 million in
the prior year period as margins improved.
- Americas: Segment operating profit
in the Americas was $116 million compared to $130 million in the
third quarter of 2022 and benefited from favorable net price and
margin expansion initiatives, which were more than offset by the
impact of lower sales volume and elevated operating costs
attributed to temporary production curtailments to balance supply
with lower demand. Segment operating profit also benefited $9
million from favorable foreign currency translation.
- Europe: Segment operating profit in
Europe was $185 million compared to $136 million in the third
quarter of 2022 and reflected favorable net price and solid
operating performance, which were partially offset by lower sales
volume and higher operating costs largely due to the headwind from
Italian energy credits received in the prior year that did not
repeat in 2023. Segment operating profit also benefited $10 million
from favorable foreign currency translation.
Retained corporate and other costs were $60
million compared to $63 million in the third quarter of 2022.
Net earnings attributable to the company were
$0.32 per share (diluted) in the third quarter of 2023 compared to
$1.45 per share (diluted) in the prior year period. Year-over-year
earnings were negatively impacted $1.30 per share by items that
management considers not representative of ongoing operations and
other adjustments, which included $0.48 per share of charges
primarily related to restructuring activities within the Americas
segment in the current year period, and a net benefit of $0.82 per
share in the prior year period principally related to the one-time
gain on a sale leaseback transaction.
Adjusted earnings were $0.80 per share (diluted)
in the third quarter of 2023, compared to $0.63 per share (diluted)
in the prior year period and the company’s guidance of $0.68 to
$0.73 per share.
2023 Outlook
Year-to-date adjusted earnings have already
exceeded full year 2022 and the company expects 2023 adjusted
earnings will approximate $3.00 per share. The current 2023 outlook
significantly exceeds O-I’s initial guidance of at least $2.50 per
share provided in January this year and represents a 30 percent
increase from 2022 adjusted earnings. Higher adjusted earnings
should reflect strong net price, solid operating performance and
the benefit from the company’s margin expansion initiatives which
will more than offset lower sales and production volume as well as
higher interest expense. The company’s current
full year and fourth quarter 2023 outlook has been adjusted from
the guidance provided on August 1, 2023. Management expects fourth
quarter adjusted earnings will lag prior year results primarily due
to lower sales volume and elevated production curtailment activity
which will be concentrated in the fourth quarter to reduce
inventory in light of softer demand and properly position the
company for the expected market recovery in 2024. As a result,
higher curtailment cost should impact fourth quarter results by
approximately 30 cents per share more than previously anticipated.
The company is accelerating margin expansion initiatives to
partially mitigate the effect of lower sales and production
levels.
|
ACTUAL |
GUIDANCE |
|
|
4Q23 |
FY23 |
|
YTD 23 |
CURRENT |
Prior |
CURRENT |
Prior |
Sales Volume Growth (in Tons) |
▼ 11% |
▼ DD |
▼ LSD/MSD |
▼ DD |
▼ MSD/HSD |
Reported Earnings Per Share (diluted) |
$2.31 |
n/a |
n/a |
n/a |
n/a |
Adjusted Earnings Per Share (EPS) |
$2.97 |
$0.03 |
$0.25-$0.35 |
~ $3.00 |
$3.10-$3.25 |
Free Cash Flow ($M) |
n/a |
n/a |
n/a |
$100-$150 FCF$400-$450 aFCF |
~ $175 FCF~ $475 aFCF |
Capital Expenditures($M) |
n/a |
n/a |
n/a |
~ $700 |
$700 - $725 |
Guidance primarily reflects the company’s
current view on sales and production volume, mix and working
capital trends as the company concludes 2023. O-I’s adjusted
earnings outlook assumes foreign currency rates as of October 30,
2023, earnings dilution from the company’s portfolio optimization
program, and incremental interest expense due to higher prevailing
interest rates and debt incurred to fund the Paddock 524(g) trust.
The full-year adjusted effective tax rate should approximate 24 to
26 percent. The earnings and cash flow guidance ranges may not
fully reflect uncertainty in macroeconomic conditions, currency
rates, and further pandemic effects such as supply chain and labor
challenges, among other factors.
Conference Call Scheduled for November 1,
2023
O-I CEO Andres Lopez and CFO John Haudrich will
conduct a conference call to discuss the company’s latest results
on Wednesday, November 1, 2023, at 8:00 a.m. EDT. A live webcast of
the conference call, including presentation materials, will be
available on the O-I website, www.o-i.com/investors, in the News
and Events section. A replay of the call will be available on the
website for a year following the event.
Contact: Sasha Sekpeh, 567-336-5128 – O-I
Investor Relations
O-I news releases are available on the O-I
website at www.o-i.com.
O-I’s year end and fourth quarter 2023 earnings
conference call is currently scheduled for Thursday, February 7,
2024, at 8:00 a.m. EST.
About O-I Glass
At O-I Glass, Inc. (NYSE: OI), we love glass and
we’re proud to be one of the leading producers of glass bottles and
jars around the globe. Glass is not only beautiful, it’s also pure
and completely recyclable, making it the most sustainable rigid
packaging material. Headquartered in Perrysburg, Ohio (USA), O-I is
the preferred partner for many of the world’s leading food and
beverage brands. We innovate in line with customers’ needs to
create iconic packaging that builds brands around the world. Led by
our diverse team of more than 24,000 people across 69 plants
in 19 countries, O-I achieved net sales of $6.9 billion in
2022. Learn more about us: o-i.com / Facebook / Twitter /
Instagram / LinkedIn
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 and use of certain non-GAAP
financial measures, including adjusted earnings, adjusted earnings
per share, free cash flow, adjusted free cash flow, adjusted
effective tax rate, segment operating profit and segment operating
profit margin provide relevant and useful supplemental financial
information that is widely used by analysts and investors, as well
as by management in assessing both consolidated and business unit
performance. These non-GAAP measures should be considered
supplemental in nature and should not be considered in isolation or
be construed as being more important than comparable GAAP
measures.
Adjusted earnings relates to net earnings
attributable to the company, exclusive of items management
considers not representative of ongoing operations and other
adjustments because such items are not reflective of the company’s
principal business activity, which is glass container production.
Adjusted earnings are divided by weighted average shares
outstanding (diluted) to derive adjusted earnings per share.
Segment operating profit relates to earnings before interest
expense, net, and before income taxes and is also exclusive of
items management considers not representative of ongoing operations
as well as certain retained corporate costs and other adjustments.
Segment operating profit margin is calculated as segment operating
profit divided by segment revenue. Adjusted effective tax rate
relates to the provision for income taxes, excluding tax items
management considers not representative of ongoing operations and
other adjustments, divided by earnings before income taxes,
exclusive of items management considers not representative of
ongoing operations and other adjustments. Management uses adjusted
earnings, adjusted earnings per share, segment operating profit,
segment operating profit margin and adjusted effective tax rate to
evaluate its period-over-period operating performance because it
believes these provide useful supplemental measures of the results
of operations of its principal business activity by excluding items
that are not reflective of such operations. The above
non-GAAP financial measures may be useful to investors in
evaluating the underlying operating performance of the company’s
business as these measures eliminate items that are not reflective
of its principal business activity.
Further, free cash flow relates to cash provided
by operating activities plus cash payments to fund the Paddock
524(g) trust and related expenses less cash payments for property,
plant, and equipment. Adjusted free cash flow relates to cash
provided by operating activities plus cash payments to fund the
Paddock 524(g) trust and related expenses less cash payments for
property, plant and equipment plus cash payments for property,
plant and equipment related to strategic or expansion projects.
Management has historically used free cash flow and adjusted free
cash flow to evaluate its period-over-period cash generation
performance because it believes these have provided useful
supplemental measures related to its principal business activity.
It should not be inferred that the entire free cash flow or
adjusted free cash flow amount is available for discretionary
expenditures, since the company has mandatory debt service
requirements and other non-discretionary expenditures that are not
deducted from these measures. Management uses non-GAAP information
principally for internal reporting, forecasting, budgeting and
calculating compensation payments.
The company routinely posts important
information on its website – www.o-i.com/investors.
Forward-Looking Statements
This press release 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 Russia-
Ukraine and Israel-Hamas conflicts 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 environmental, social and governance
scrutiny and changing expectations from stakeholders 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 of operations and financial
condition, the company does not assume any obligation to update or
supplement any particular forward-looking statements contained in
this document.
- 3Q 2023 O-I Glass Earnings Presentation
- 3Q 2023 O-I Glass Earnings Release
For more information, contact:
Chris Manuel
Vice President of Investor Relations
567-336-2600
Chris.Manuel@o-i.com
Grafico Azioni OI Glass (NYSE:OI)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni OI Glass (NYSE:OI)
Storico
Da Giu 2023 a Giu 2024