FOR IMMEDIATE RELEASE
O-I Glass, Inc. (“O-I”) (NYSE: OI) today
reported financial results for the full year and fourth quarter
ended December 31, 2023.
Full Year 2023 Results
|
Net Earnings (Loss) Attributable toTo the
CompanyEarnings Per Share (Diluted) |
Earnings Before Income
Taxes$M |
Cash Provided by Operating
Activities$M |
FY23 |
FY22 |
FY23 |
FY22 |
FY23 |
FY22 |
Reported |
($0.67) |
$3.67 |
$67 |
$805 |
$818 |
$154 |
|
Adjusted EarningsEarnings Per Share
(Diluted) |
Segment Operating Profit$M |
Free Cash Flow $M |
FY23 |
FY22 |
FY23 |
FY22 |
FY23 |
FY22 |
Non - GAAP |
$3.09(Guidance: ~ $3.00) |
$2.30 |
$1,193 |
$960 |
$130(Guidance: $100-$150) |
$236 |
“I’m pleased to report strong 2023 performance
as we successfully navigated softer macro conditions that developed
over the course of the year including significant inventory
de-stocking across the value chain. O-I continued to execute well
through the fourth quarter and business performance moderately
exceeded our expectations. As we concluded the year, strong net
price and the benefit from our margin expansion initiatives helped
mitigate the impact of softer demand and elevated production
curtailment to balance supply with lower shipments,” said Andres
Lopez, O-I Glass CEO.
“In addition to operating well in 2023, we
continued to advance our long-term strategy. The benefit from
margin expansion initiatives significantly exceeded our target with
the strongest results in that program’s seven-year history. We made
solid progress on our capital expansion program completing the
first round of new capacity additions in Canada and Colombia, on
time and on budget. Importantly, development efforts for MAGMA and
ULTRA continued and our first MAGMA Greenfield project in Bowling
Green, KY is on track to be commissioned in mid-2024. Our freshly
updated ESG roadmap has been fully integrated into our strategy and
long-term capital allocation plan as we advance glass as the most
sustainable packaging solution. Finally, our balance sheet is in
its best position in nearly a decade.”
“Building off our strong operating performance
last year, O-I is well positioned to manage through current soft
macro conditions that should improve as the year progresses. I
believe the most challenging market conditions are behind us and we
anticipate stronger future earnings as both sales and production
volumes recover to pre-pandemic levels over time,” concluded
Lopez.
Net sales were $7.1 billion in 2023, up
approximately 4 percent compared to $6.9 billion in the prior year
primarily due to higher average selling prices as well as favorable
foreign currency translation. As anticipated, sales volume (in
tons) was down 12 percent from the prior year mainly attributed to
elevated inventory destocking across the value chain amid modestly
softer consumer consumption.
Earnings before income taxes were $67 million in
2023, down from $805 million in the prior year mostly due to items
management does not consider representative of ongoing operations
which included a $445 million charge for impairment of goodwill in
the company’s North America reporting unit in 2023 as well as a
$334 million one-time gain on sales-leaseback transactions in 2022
that did not repeat. The goodwill impairment primarily reflected
changes in macro conditions resulting in lower sales volumes and a
smaller asset base following recent restructuring activities
intended to improve long-term performance as well as the impact of
a higher weighted average cost of capital on valuation given
elevated interest rates. Earnings also reflected higher segment
operating profit which was partially offset by elevated interest
expense.
Segment operating profit was $1,193 million in
2023 compared to $960 million in the prior year.
- Americas: Segment
operating profit in the Americas was $511 million compared to $472
million in 2022 and primarily benefited from favorable net price
and margin expansion initiatives which were partially offset by the
impact of lower sales volume and elevated operating costs mostly
attributed to temporary production curtailments to balance supply
with lower demand. Segment operating profit also benefited $12
million from favorable foreign currency translation.
- Europe: Segment operating profit in
Europe was $682 million compared to $488 million in 2022 and
primarily benefited from favorable net price and margin expansion
initiatives. These benefits were partially offset by lower sales
volume as well as higher operating costs due to temporary
production curtailments to balance supply with lower demand.
Segment operating profit also benefited $17 million from favorable
foreign currency translation.
Retained corporate and other costs were $224
million, down from $232 million in 2022.
O-I reported a loss attributable to the company
of $0.67 per share (diluted) in 2023, compared to earnings of $3.67
per share (diluted) in 2022.
Adjusted earnings were $3.09 per share (diluted)
in 2023, exceeding management’s most recent guidance of
approximately $3.00 per share (diluted) and compared to $2.30 per
share (diluted) in 2022.
Cash provided by operating activities was $818
million in 2023 compared to $154 million in 2022 which included a
$621 million one-time payment to fund the Paddock Trust and related
expenses.
Free cash flow was $130 million in 2023, within
management’s most recent outlook of $100 million to $150 million
and compared to $236 million in the prior year. Free cash flow
included elevated capital expenditures of $688 million in 2023
compared to most recent guidance of approximately $700 million and
$539 million in 2022.
Total debt was $4.9 billion on December 31,
2023, compared to $4.7 billion at prior year end. Net debt was $4.0
billion compared to $3.9 billion in 2022.
Fourth Quarter 2023 Results
|
Net Earnings (Loss) Attributable to the Company
Earnings Per Share (Diluted) |
Earnings (Loss) Before Income
Taxes$M |
4Q23 |
4Q22 |
4Q23 |
4Q22 |
Reported |
($3.05) |
$0.08 |
($439) |
$29 |
|
Adjusted EarningsEarnings Per Share
(Diluted) |
Segment Operating Profit$M |
4Q23 |
4Q22 |
4Q23 |
4Q22 |
Non - GAAP |
$0.12(Guidance: ~ $0.03) |
$0.38 |
$168 |
$206 |
Net sales were $1.6 billion in the fourth
quarter of 2023 compared to $1.7 billion in the prior year period
as the benefit from higher average selling prices and favorable
foreign currency translation partially offset a 16 percent decline
in sales volumes (in tons).
The company reported a $439 million loss before
income taxes in the fourth quarter of 2023 compared to earnings
before income tax of $29 million in the prior year quarter. This
decrease was mostly due to items management does not consider
representative of ongoing operations which included the
aforementioned $445 million charge for impairment of goodwill in
the company’s North America reporting unit in 2023. Earnings before
income tax also reflected lower segment operating profit and
elevated interest expense. Segment operating profit
was $168 million in the fourth quarter of 2023 compared to $206
million in the prior year period.
- Americas: Segment
operating profit in the Americas was $93 million compared to $83
million in the fourth quarter of 2022 as favorable net price and
margin expansion initiatives more than offset lower sales volume
and moderately higher operating costs. Segment operating profit
also benefited $2 million from favorable foreign currency
translation.
- Europe: Segment operating profit in
Europe was $75 million compared to $123 million in the fourth
quarter of 2022 as favorable net price partially offset lower
shipment levels and significantly higher operating costs due to
elevated temporary production curtailment to balance supply with
softer demand. Segment operating profit also benefited $4 million
from favorable foreign currency translation.
Retained corporate and other costs were $49
million, down from $66 million in 2022.
The company reported a loss attributable to the
company of $3.05 per share (diluted) in the fourth quarter of 2023
compared to earnings of $0.08 per share (diluted) in the fourth
quarter of 2022.
Adjusted earnings were $0.12 per share (diluted)
in the fourth quarter of 2023, higher than management's most recent
guidance of approximately $0.03 per share (diluted) and compared to
$0.38 (diluted) per share in the prior year quarter.
2024 Outlook
|
2023 Actual |
2024 Guidance |
Sales Volume Growth (in Tons) |
▼ 12% |
▲ LSD / MSD |
Adjusted Earnings Per Share |
$3.09 |
$2.25 - $2.65 |
Free Cash Flow ($M) |
$130 |
$150 - $200 |
O-I expects 2024 adjusted earnings of $2.25 to
$2.65 per share which should meet or exceed the company’s 2024
earnings target of $2.20 to $2.40 per share set during the last
Investor Day in 2021. Results will likely be down from 2023, which
represented O-I’s highest adjusted earnings in the past 15 years,
as the company expects the benefit of low-to-mid single digit
volume growth and the company’s robust margin expansion initiatives
will partially mitigate the impact of lower net price and higher
interest expense. While net price will likely decline in 2024, the
company expects to retain 75 percent of the favorable net price
realized over the prior two years. Furthermore, the company will
benefit from strong operating leverage as sales and production
volumes more fully recover to pre-pandemic levels over time.
O-I anticipates 2024 free cash flow will
approximate $150 million to $200 million, an improvement from 2023
levels as reduced capital expenditures more than offset lower
operating results and elevated tax and interest payments.
Guidance primarily reflects the company’s
current view on sales and production volume, mix and working
capital trends. O-I’s adjusted earnings outlook assumes foreign
currency rates as of January 31, 2024, and a full-year adjusted
effective tax rate of approximately 25 to 27 percent. The earnings
and cash flow guidance ranges may not fully reflect uncertainty in
macroeconomic conditions, currency rates, energy and raw materials
costs, supply chain disruptions and labor challenges, among other
factors.
Conference Call Scheduled for February 7,
2023
O-I CEO Andres Lopez and CFO John Haudrich will
conduct a conference call to discuss the company’s latest results
on Wednesday, February 7, 2023, at 8:00 a.m. EST 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 first quarter 2024 earnings conference
call is currently scheduled for Wednesday, May 1, 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 approximately 23,000 people across
68 plants in 19 countries, O-I achieved net sales of $7.1
billion in 2023. 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, segment operating profit, segment
operating profit margin, net debt and adjusted effective tax rate
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 are reconciled to the most directly comparable
GAAP measures and 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 (loss)
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 (loss) 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 provision for income taxes, exclusive of items
management considers not representative of ongoing operations and
other adjustments divided by earnings (loss) 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.
Net debt is defined as total debt less cash.
Management uses net debt to analyze the liquidity of the
company.
Further, free cash flow relates to cash provided
by operating activities plus cash payments to the Paddock 524(g)
trust and related expenses less cash payments for property, plant,
and equipment. Management has historically used 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 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, trade
disputes, 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,
public health issues and weather, (2) cost and availability of raw
materials, labor, energy and transportation (including impacts
related to the current Ukraine-Russia and Israel-Hamas conflicts
and disruptions in supply of raw materials caused by transportation
delays), (3) competitive pressures, consumer preferences for
alternative forms of packaging or consolidation among competitors
and customers, (4) changes in consumer preferences or customer
inventory management practices, (5) the continuing consolidation of
the Company’s customer base, (6) the Company’s ability to improve
its glass melting technology, known as the MAGMA program, and
implement it within the timeframe expected, (7) unanticipated
supply chain and operational disruptions, including higher capital
spending, (8) seasonability of customer demand, (9) the failure of
the Company’s joint venture partners to meet their obligations or
commit additional capital to the joint venture, (10) labor
shortages, labor cost increases or strikes, (11) 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, (12) the
Company’s ability to generate sufficient future cash flows to
ensure the Company’s goodwill is not impaired, (13) any increases
in the underfunded status of the Company’s pension plans, (14) any
failure or disruption of the Company’s information technology, or
those of third parties on which the Company relies, or any
cybersecurity or data privacy incidents affecting the Company or
its third-party service providers, (15) risks related to the
Company’s indebtedness or changes in capital availability or cost,
including interest rate fluctuations and the ability of the Company
to generate cash to service indebtedness and refinance debt on
favorable terms, (16) risks associated with operating in foreign
countries, (17) foreign currency fluctuations relative to the U.S.
dollar, (18) changes in tax laws or U.S. trade policies, (19) the
Company’s ability to comply with various environmental legal
requirements, (20) risks related to recycling and recycled content
laws and regulations, (21) risks related to climate-change and air
emissions, including related laws or regulations and increased ESG
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.
- FY & 4Q 2023 O-I Glass Earnings Presentation
- FY & 4Q 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