O-I GLASS REPORTS SECOND QUARTER 2024 RESULTS
O-I Glass (NYSE: OI) reported its Q2 2024 financial results, showing a decline in performance compared to the previous year. Net sales decreased to $1.7 billion from $1.9 billion in Q2 2023, with a 4.5% decline in sales volume. Earnings before income taxes fell to $104 million from $154 million, while adjusted earnings per share dropped to $0.44 from $0.88.
The company has revised its full-year 2024 guidance, now expecting flat to slightly lower sales volume and adjusted EPS of $1.00 - $1.25. Free cash flow outlook has been reduced to $50 - $100 million. O-I's new CEO, Gordon Hardie, announced a new competitiveness program called 'Fit To Win' aimed at boosting performance over the next three years.
O-I Glass (NYSE: OI) ha riportato i risultati finanziari del Q2 2024, evidenziando un calo delle performance rispetto all'anno precedente. Le vendite nette sono diminuite a 1,7 miliardi di dollari rispetto ai 1,9 miliardi di dollari del Q2 2023, con un declino del 4,5% nel volume delle vendite. Il reddito prima delle imposte è sceso a 104 milioni di dollari da 154 milioni, mentre l'utile per azione rettificato è sceso a 0,44 dollari da 0,88 dollari.
L'azienda ha rivisto le previsioni per l'intero anno 2024, aspettandosi ora un volume di vendite stabile o leggermente inferiore e un EPS rettificato di $1,00 - $1,25. Le aspettative sul flusso di cassa libero sono state ridotte a $50 - $100 milioni. Il nuovo CEO di O-I, Gordon Hardie, ha annunciato un nuovo programma di competitività chiamato 'Fit To Win', mirato a migliorare le performance nei prossimi tre anni.
O-I Glass (NYSE: OI) informó sus resultados financieros del Q2 2024, mostrando una disminución en el rendimiento en comparación con el año anterior. Las ventas netas disminuyeron a 1.7 mil millones de dólares desde 1.9 mil millones en el Q2 2023, con una caída del 4.5% en el volumen de ventas. Las ganancias antes de impuestos cayeron a 104 millones de dólares desde 154 millones, mientras que las ganancias por acción ajustadas cayeron a 0.44 dólares desde 0.88 dólares.
La compañía ha revisado su guía para todo el año 2024, ahora esperando un volumen de ventas plano o ligeramente inferior y un EPS ajustado de $1.00 - $1.25. Las proyecciones de flujo de caja libre se han reducido a $50 - $100 millones. El nuevo CEO de O-I, Gordon Hardie, anunció un nuevo programa de competitividad llamado 'Fit To Win', destinado a mejorar el rendimiento en los próximos tres años.
O-I Glass (NYSE: OI)는 2024년 2분기 재무 결과를 발표했으며, 지난해 대비 성과 감소를 보여주었습니다. 순매출이 17억 달러로 감소하여 2023년 2분기 19억 달러에서 줄어들었으며, 판매량은 4.5% 감소했습니다. 세전 수익은 1억 400만 달러로 감소했습니다 154백만 달러에서 줄어들었고, 조정 주당 순이익은 0.44달러로 떨어졌습니다 0.88달러에서 감소했습니다.
회사는 2024년 전체 연도 가이드를 수정하여 이제는 매출량이 평평하거나 약간 낮아질 것으로 예상하며, 조정된 EPS는 $1.00 - $1.25입니다. 자유 현금 흐름 전망은 $50 - $100백만으로 축소되었습니다. O-I의 새로운 CEO인 고든 하디는 향후 3년간 성과를 높이기 위해 'Fit To Win'이라는 새로운 경쟁력 프로그램을 발표했습니다.
O-I Glass (NYSE: OI) a annoncé ses résultats financiers du 2e trimestre 2024, montrant une baisse de performance par rapport à l'année précédente. Le chiffre d'affaires net a diminué à 1,7 milliard de dollars contre 1,9 milliard de dollars au 2e trimestre 2023, avec une baisse de 4,5 % du volume des ventes. Le résultat avant impôts a chuté à 104 millions de dollars contre 154 millions, tandis que le bénéfice par action ajusté est tombé à 0,44 dollar contre 0,88 dollar.
L'entreprise a révisé ses prévisions pour l'ensemble de l'année 2024, s'attendant désormais à un volume de ventes stable ou légèrement inférieur et à un BPA ajusté de 1,00 à 1,25 dollar. Les perspectives de flux de trésorerie disponible ont été réduites à 50 à 100 millions de dollars. Le nouveau PDG d'O-I, Gordon Hardie, a annoncé un nouveau programme de compétitivité appelé 'Fit To Win', visant à améliorer la performance au cours des trois prochaines années.
O-I Glass (NYSE: OI) hat seine finanziellen Ergebnisse für das 2. Quartal 2024 veröffentlicht und dabei einen Rückgang der Leistung im Vergleich zum Vorjahr festgestellt. Der Nettoumsatz fiel auf 1,7 Milliarden Dollar von 1,9 Milliarden Dollar im 2. Quartal 2023, wobei das Verkaufsvolumen um 4,5% zurückging. Der Gewinn vor Einkommensteuern sank auf 104 Millionen Dollar von 154 Millionen, während der bereinigte Gewinn pro Aktie auf 0,44 Dollar fiel von 0,88 Dollar.
Das Unternehmen hat seine Prognose für das Gesamtjahr 2024 überarbeitet und erwartet nun ein stagnierendes oder leicht rückläufiges Verkaufsvolumen sowie einen bereinigten EPS von 1,00 - 1,25 Dollar. Die Prognose für den freien Cashflow wurde auf 50 - 100 Millionen Dollar reduziert. Der neue CEO von O-I, Gordon Hardie, kündigte ein neues Wettbewerbsprogramm mit dem Namen 'Fit To Win' an, das darauf abzielt, die Leistung in den nächsten drei Jahren zu steigern.
- Sequential improvement in year-over-year shipments as destocking moderated
- Anticipation of year-over-year sales volume growth beginning in H2 2024
- Introduction of 'Fit To Win' program to boost performance over next three years
- Reduction in retained corporate and other costs from $54M to $32M
- Decrease in net interest expense from $118M to $87M
- Net sales decreased by 10.5% to $1.7B in Q2 2024
- Earnings before income taxes fell by 32.5% to $104M
- Adjusted earnings per share dropped by 50% to $0.44
- Sales volume declined by 4.5% in Q2 2024
- Downward revision of full-year 2024 guidance for sales volume, adjusted EPS, and free cash flow
- Planned closure of at least six furnaces over next three quarters
Insights
O-I Glass's Q2 2024 results reveal a challenging period for the company, with net earnings per share dropping to
- Net sales decreased to
$1.7 billion from$1.9 billion , driven by lower average selling prices (-2% ) and reduced sales volume (-4.5% ). - Segment operating profit declined from
$326 million to$233 million , with both Americas and Europe segments experiencing downturns. - The effective tax rate increased to
40% from27% , further impacting bottom-line results.
The company's revised guidance for FY2024 is particularly concerning. Adjusted EPS forecast has been significantly lowered to
However, the appointment of new CEO Gordon Hardie and the announcement of the "Fit To Win" program offer potential for future improvement. This initiative, aimed at boosting performance over the next three years, could be a catalyst for turning the company's fortunes around if executed effectively.
Investors should closely monitor the implementation of the Fit To Win program and its impact on operational efficiency and profitability in the coming quarters. The planned closure of at least six furnaces as part of restructuring efforts may lead to short-term costs but could improve long-term competitiveness.
The Q2 2024 results for O-I Glass reflect broader market trends and consumer behavior shifts that are impacting the glass packaging industry. Key observations include:
- Gradual improvement in demand, albeit slower than expected, with anticipation of year-over-year sales volume growth in H2 2024.
- Continued destocking across the value chain, though moderating, indicating a cautious approach by retailers and distributors.
- Soft macroeconomic conditions affecting consumer consumption, leading to flat or slightly declining sales volume projections for the full year.
The company's performance in different regions provides insights into market dynamics:
Americas: The
Europe: Flat sales volume but lower net price points to intense competition and possible overcapacity in the market. This aligns with the planned furnace closures to optimize the network.
The focus on inventory control, including additional production curtailment, reflects a strategic move to align supply with demand. This could position O-I Glass for improved performance in 2025 if market conditions stabilize.
The Fit To Win program, with its emphasis on competitiveness and customer proximity, aligns with industry trends towards efficiency and customer-centric approaches. Its success could be pivotal in navigating the challenging market landscape.
Investors should watch for signs of recovery in consumer spending, particularly in food and beverage sectors, as well as any shifts in packaging preferences that could impact glass demand in the medium to long term.
Gradually Improving Demand Amid Soft Macro Conditions; New CEO Outlines Top Priorities
PERRYSBURG, Ohio, July 30, 2024 (GLOBE NEWSWIRE) -- FOR IMMEDIATE RELEASE
O-I Glass, Inc. (“O-I”) (NYSE: OI) today reported financial results for the second quarter ended June 30, 2024.
| Net Earnings Attributable to the Company Per Share (Diluted) | Earnings Before Income Taxes $M | |||||||
| 2Q24 | 2Q23 | 2Q24 | 2Q23 | |||||
| Reported | $0.36 | $0.69 | $104 | $154 | ||||
| Adjusted Earnings Earnings Per Share (Diluted) | Segment Operating Profit $M | |||||||
| 2Q24 | 2Q23 | 2Q24 | 2Q23 | |||||
| Non - GAAP | $0.44 | $0.88 | $233 | $326 | ||||
“It is a privilege to be O-I’s new CEO. I have spent my career serving the food and beverage industries across the world. I have always appreciated the role of glass packaging in food safety and brand building. O-I does more than make glass. We help our customers create millions of moments of enjoyment for countless consumers every day. Having served on O-I’s Board of Directors since 2015 and named CEO in May, I see a clear path to make O-I a more valuable company by being safer, more competitive and closer to our customers,” said Gordon Hardie, O-I Glass CEO.
“Going forward, O-I will take an economic profit mindset to future value creation starting with a new competitiveness program, Fit To Win, aimed at increasing the value of our company. Fit To Win is expected to significantly boost performance over the next three years through a series of focused efforts that are largely within our span of control. We are determined to increase the value of O-I for all our stakeholders.”
“Turning to recent performance, our second quarter net earnings attributable to the company were down from the historically strong performance in the prior year. However, we did see good sequential improvement in year-over-year shipments as destocking across the value chain moderated. While the pace of recovery has been slower than expected, we anticipate year-over-year sales volume growth beginning in the second half of 2024 and stronger future earnings as we implement our Fit To Win program,” concluded Hardie.
Net sales were
Earnings before income taxes was
Segment operating profit was
- Americas: Segment operating profit in the Americas was
$106 million , down from$126 million in the prior year period primarily due to 8.5 percent lower sales volume (in tons) while net price was slightly positive. Operating costs increased modestly as benefits from O-I’s margin expansion initiatives were substantially offset by significant temporary production curtailment to balance supply with lower demand. Segment operating profit also benefited$4 million from favorable foreign currency translation. - Europe: Segment operating profit in Europe was
$127 million , down from$200 million in the prior year period mostly due to lower net price while sales volume (in tons) was flat. Operating costs were higher compared to the prior year due to elevated temporary production curtailment. Segment operating profit was impacted$3 million from unfavorable foreign currency translation.
Retained corporate and other costs were
Net earnings attributable to the company was
Adjusted earnings were
2024 Outlook
| FY24 GUIDANCE | ||
| CURRENT | Prior | |
| Sales Volume Growth (in Tons) | Flat to ▼ LSD | Flat to ▲ LSD |
| Adjusted Earnings Per Share (EPS) | ||
| Free Cash Flow ($M) | ||
The company has adjusted its full-year guidance to reflect softer than expected demand as well as rapid inventory control efforts that we expect will properly position the company for a strong 2025.
Given sluggish consumer consumption, the company now expects sales volume will be flat or down slightly compared to prior year levels. Adjusted earnings per share of
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 July 30, 2024, and a full-year adjusted effective tax rate of approximately 33 to 35 percent compared to the prior outlook of 30 to 33 percent. The adjusted earnings and free 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 July 31, 2024
O-I’s management team will conduct a conference call to discuss the company’s latest results on Wednesday, July 31, 2024, 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 third quarter 2024 earnings conference call is currently scheduled for Wednesday, October 30, 2024 at 8:00 a.m. EDT.
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
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 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 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 net sales. 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 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 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 from other glass container producers and 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) the Company’s ability to achieve expected benefits from margin expansion and profitability initiatives, such as its Fit to Win program, including expected impacts from production curtailments and furnace closures, (9) seasonality of customer demand, (10) the failure of the Company’s joint venture partners to meet their obligations or commit additional capital to the joint venture, (11) labor shortages, labor cost increases or strikes, (12) 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, (13) the Company’s ability to generate sufficient future cash flows to ensure the Company’s goodwill is not impaired, (14) any increases in the underfunded status of the Company’s pension plans, (15) 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, (16) 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, (17) risks associated with operating in foreign countries, (18) foreign currency fluctuations relative to the U.S. dollar, (19) changes in tax laws or U.S. trade policies, (20) the Company’s ability to comply with various environmental legal requirements, (21) risks related to recycling and recycled content laws and regulations, (22) 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.
Attachments
FAQ
What were O-I Glass's Q2 2024 earnings results?
How did O-I Glass's sales volume change in Q2 2024?
What is O-I Glass's revised guidance for full-year 2024?
What new initiative did O-I Glass announce to improve performance?
How many furnace closures does O-I Glass plan in the coming quarters?
