FOR IMMEDIATE
RELEASE
O-I REPORTS THIRD
QUARTER 2018 RESULTS
PERRYSBURG, Ohio (October 30,
2018) - Owens-Illinois, Inc. (NYSE: OI) today reported
financial results for the third quarter ended September 30,
2018.
"Our third quarter results were in line with
management's guidance, despite headwinds from foreign currency and
transitory volume trends," said Andres Lopez, CEO. "Our
European operations profited from ongoing favorable sales mix,
pricing dynamics and continued cost reduction efforts. In the
Americas, O-I demand for glass was modestly positive when
incorporating the strong year-on-year performance of our joint
venture with CBI. In Asia Pacific, we successfully completed
our asset advancement projects for the year and will return the
region to more normalized margins in the fourth quarter.
Building on a solid foundation at O-I, we expect renewed
growth in sales, margins, earnings and cash flow in 2019 and
beyond."
Highlights
-
For the third quarter of 2018, earnings from
continuing operations were $0.75 per share (diluted), compared with
$0.77 per share in 2017. The adverse impact of foreign
currency exchange rates was $0.04 in the quarter.
-
Net sales were $1.7 billion, which was 3 percent
lower than prior year third quarter, largely due to the adverse
impact of the stronger U.S. dollar.
-
Shipments declined compared with prior year,
primarily due to the transfer of production to our joint venture
with Constellation Brands and the impact of the poor 2017 grape
harvest in Europe. These headwinds were partially offset by
price gains, which were reported in all segments.
-
Earnings from continuing operations before
income taxes were $168 million for the third quarter compared with
$172 million for the same period in 2017.
-
Segment operating profit of reportable
segments[1]P for the
third quarter of 2018 was $255 million, $5 million lower than prior
year period. Excluding the $9 million adverse impact from
foreign currency, segment operating profit was up 2 percent.
Improved pricing, which modestly outpaced operating costs in
the quarter, was a key factor driving results. In line with
management expectations, segment operating profit in Europe was
higher year-on-year, nearly flat in the Americas and lower in Asia
Pacific.
- The Company repurchased approximately 0.7 million
shares in the quarter. Through the third quarter of 2018, the
Company repurchased a total of 5.4 million shares.
- In October, the Company received the Vision for
America Award, which is presented annually by Keep America
Beautiful. The Company was selected for significantly
enhancing civic, environmental and social stewardship. O-I is
the first food and beverage packaging company to achieve a gold
rating in material health on the Cradle to Cradle Product
Scorecard. The Company also published an updated Corporate
Social Responsibility report, which may be found on O-I.com.
Third Quarter 2018
Results
Net sales in the third quarter of 2018 were $1.7
billion, which was 3 percent lower than prior year third
quarter. The impact of currency adversely impacted net sales
by 3 percent, and manifested in every region, yet was most
pronounced in Americas (down 4 percent) and Asia Pacific (down 7
percent). Prices were up approximately 2 percent, reflecting
a favorable sales mix and ongoing cost inflation.
Global sales shipments were down 2 percent
compared with prior year. Sales in Europe were lower than
prior year, despite higher shipments to non-alcoholic beverage
customers. Shipments to wine customers declined due to the
weak grape harvest in the prior year and to food customers due to
mix management. Within the Americas, lower shipments in the
U.S. - owing to shifting production to the JV with CBI and to
ongoing trends in beer - were largely offset by gains reported in
nearly every other country. Shipments in Asia Pacific were
lower year-on-year, largely due to Australia, which had strong
sales in the comparable period; shipments in the rest of the region
were up nearly 10 percent compared with prior year.
The Company's joint venture with Constellation
Brands, Inc., continues to perform well, again reporting higher
sales compared with prior year, driven in part by the fourth
furnace that ramped up earlier this year. The fifth furnace
is expected to be operational by the end of 2019.
Segment operating profit was $255 million in the
quarter, compared with $260 million in the same period of 2017.
This decline was largely attributed to the $9 million
unfavorable effect of foreign exchange currency rates.
-
In Europe, segment operating profit continues to
expand year-on-year. In the third quarter of 2018, segment
operating profit was $87 million, up 7 percent compared with $81
million in the third quarter of 2017. This increase was
essentially driven by price increases that more than offset cost
inflation. The region was able to largely offset the
non-occurrence of an energy credit through a gain related to an
asset sale and the impact of continued progress in reducing its
structural costs through restructuring and its Total System Cost
improvement.
-
Segment operating profit in the Americas in the
third quarter of 2018 was $158 million, nearly on par with prior
year. The favorable price gains reported across the region
kept pace with cost inflation. In addition, the impact of lower
volumes was fully offset by improved product mix and a gain related
to a favorable court ruling in Brazil, which will allow the Company
to recover revenue tax paid from previous years.
-
Segment operating profit in Asia Pacific in the
third quarter of 2018 was $10 million. The magnitude of the
year-on-year decline was in line with management expectations;
sequentially, segment operating profit margins in the third quarter
were substantially higher. Planned asset improvement projects
in the region drove operating costs higher. With the
successful completion of these projects, Asia Pacific is expected
to benefit from improving production volume and lower manufacturing
expense going forward. As a result, fourth quarter segment
operating profit is expected to be nearly double prior year fourth
quarter.
Retained corporate and other costs were in line
with prior year. Planned increased investments in research
and development were offset by lower selling and administrative
expenses.
The Company continues to actively manage its debt
structure to mitigate financial risk, lower interest expense and
reduce complexity. Net interest expense was essentially in
line with prior year. While variable interest rates have been
rising in the U.S., the Company benefited from lower pricing under
its Bank Credit Agreement and its exposure to variable rates in
Europe, which have been largely stable.
The Company launched its $400 million share
repurchase program during the first quarter of 2018. In the
third quarter of 2018, the Company repurchased approximately 0.7
million shares for approximately $12 million. Through the
third quarter of 2018, the Company has repurchased 5.4 million
shares for $107 million.
Outlook
For the full year 2018, the Company expects
earnings from continuing operations to be in the range of $2.26 to
$2.32 per share.
Excluding certain items management considers not
representative of ongoing operations, the Company expects adjusted
earnings to be in the range of $2.72 to $2.78, based on foreign
currency exchange rates as of the end of third quarter 2018.
Management efforts to drive operational improvements are partially
offsetting incremental pressure from the strong US dollar and
lower-than-anticipated sales volumes in the second half of the
year.
The Company expects cash provided by continuing
operating activities for 2018 to be in the range of $750 to $775
million and adjusted free cash flow to be in the range of $350 to
$375 million. These estimates are $25 to $50 million lower
than prior guidance. The impact of currency continues to
weigh on cash generation translated into US dollars. And,
inventories are now expected to be a use of cash, due to the
revised outlook for sales volumes in late 2018.
The earnings and cash flow guidance ranges may not
fully reflect uncertainty in macroeconomic conditions and currency
rates, among other factors.
Conference Call Scheduled for
October 31, 2018
O-I CEO Andres Lopez and CFO Jan Bertsch will conduct a conference
call to discuss the Company's latest results on Wednesday, October
31, 2018, 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 Webcasts and
Presentations section.
The conference call also may be accessed by
dialing 888-733-1701 (U.S. and Canada) or 706-634-4943
(international) by 7:50 a.m. EDT, on October 31, 2018. Ask
for the O-I conference call. A replay of the call will be available
on the O-I website, www.o-i.com/investors, for a year following the
call.
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 2018 earnings conference call is currently
scheduled for Wednesday, February 6, 2019, at 8:00 a.m. EST.
About O-I
Owens-Illinois, Inc. (NYSE: OI) is the world's
largest glass container manufacturer and preferred partner for many
of the world's leading food and beverage brands. The Company
had revenues of $6.9 billion in 2017 and employs more than 26,500
people at 78 plants in 23 countries. With global headquarters
in Perrysburg, Ohio, O-I delivers safe, sustainable, pure, iconic,
brand-building glass packaging to a growing global marketplace.
For more information, visit www.o-i.com.
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, segment operating profit, segment operating
profit margin and adjusted free cash flow, provide relevant and
useful supplemental financial information, which 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 from
continuing operations attributable to the Company, exclusive
of items management considers not representative of ongoing
operations 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 from continuing
operations 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 cost. Segment operating profit margin is segment
operating profit divided by segment net sales. Management
uses adjusted earnings, adjusted earnings per share, segment
operating profit and segment operating profit margin to evaluate
its period-over-period operating performance because it believes
this provides a useful supplemental measure of the results of
operations of its principal business activity by excluding items
that are not reflective of such operations. Adjusted
earnings, adjusted earnings per share, segment operating profit and
segment operating profit margin 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, adjusted free cash flow relates to cash
provided by continuing operating activities less additions to
property, plant and equipment plus asbestos-related payments.
Management uses adjusted free cash flow to evaluate its
period-over-period cash generation performance because it believes
this provides a useful supplemental measure related to its
principal business activity. Adjusted free cash flow may be
useful to investors to assist in understanding the comparability of
cash flows generated by the Company's principal business activity.
Since a significant majority of the Company's
asbestos-related claims are expected to be received in the next ten
years, adjusted free cash flow may help investors to evaluate the
long-term cash generation ability of the Company's principal
business activity as these asbestos-related payments decline.
It should not be inferred that the entire 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 the
measure. 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 document contains "forward-looking"
statements 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. 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 the Company's future financial performance may
differ from expectations due to a variety of factors including, but
not limited to the following: (1) foreign currency fluctuations
relative to the U.S. dollar, (2) changes in capital availability or
cost, including interest rate fluctuations and the ability of the
Company to refinance debt at favorable terms, (3) 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, and changes in tax rates and laws, (4) the Company's
ability to generate sufficient future cash flows to ensure the
Company's goodwill is not impaired, (5) consumer preferences for
alternative forms of packaging, (6) cost and availability of raw
materials, labor, energy and transportation, (7) the Company's
ability to manage its cost structure, including its success in
implementing restructuring plans and achieving cost savings, (8)
consolidation among competitors and customers, (9) the Company's
ability to acquire businesses and expand plants, integrate
operations of acquired businesses and achieve expected synergies,
(10) unanticipated expenditures with respect to environmental,
safety and health laws, (11) unanticipated operational disruptions,
including higher capital spending, (12) the Company's ability to
further develop its sales, marketing and product development
capabilities, (13) the failure of the Company's joint venture
partners to meet their obligations or commit additional capital to
the joint venture, (14) the Company's ability to prevent and detect
cybersecurity threats against its information technology systems,
(15) the Company's ability to accurately estimate its total
asbestos-related liability or to control the timing and occurrence
of events related to outstanding asbestos-related claims, including
but not limited to settlements of those claims, (16) changes in
U.S. trade policies, (17) the Company's ability to achieve its
strategic plan, and the other risk factors discussed in the Annual
Report on Form 10-K for the year ended December 31, 2017 and the
Company's other 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.
[1] Segment
operating profit of reportable segments ("segment operating
profit") is a non-GAAP financial measure. See tables included in
this release for reconciliations to the most directly comparable
GAAP measures.
3Q 2018 Earnings Release
O-I Logo
3Q 2018 Earnings Presentation
This
announcement is distributed by West Corporation on behalf of West
Corporation clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Owens-Illinois, Inc. via Globenewswire
OI Glass (NYSE:OI)
Gráfico Histórico do Ativo
De Mar 2024 até Abr 2024
OI Glass (NYSE:OI)
Gráfico Histórico do Ativo
De Abr 2023 até Abr 2024