O-I Glass Reports Strong Third Quarter 2021 Results

“We are pleased with O-I’s third quarter business performance. Once again, we delivered on our commitments as performance exceeded the company’s guidance range, despite a number of macro challenges. Demand for glass containers remains strong, yet shipments were down slightly due to choppy demand patterns, mix management and ongoing supply chain disruptions. On the other hand, higher average selling prices fully offset escalating cost inflation, and earnings benefited from continued solid operating and cost performance supported by the company’s Margin Expansion initiatives. Cash From Operating Activities and Free Cash Flow1 were also strong reflecting solid earnings and debt was the lowest level since 2015,” said Andres Lopez, CEO.

“We continue to advance O-I’s strategy and have made very good progress on our 2021 priorities. With $50 million of benefits year-to-date, our Margin Expansion initiatives have already achieved the company’s full year target. O-I is redefining glass production with our new MAGMA solution. We have successfully commercialized the Generation 1 MAGMA line at Holzminden, Germany, and our Generation 2 pilot is proceeding well. As we seek to rebalance the packaging dialogue, our glass advocacy digital marketing campaign has connected with over 99 million consumers across North America, and we issued our 2021 sustainability report in August that showcases how we are advancing our ESG position. As part of our ongoing portfolio optimization program, we recently announced our intent to sell our Le Parfait brand and business in France at an attractive valuation that also includes a long-term strategic supply agreement. The combination of rebalancing O-I’s business portfolio and addressing legacy asbestos and pension liabilities will significantly improve the company’s financial flexibility. All of these actions are consistent with our strategy to increase stakeholder value. We are pleased with our momentum and we are increasing our full-year 2021 outlook.”

Third Quarter 2021 Results:
Reported Results: For the third quarter 2021, the company recorded earnings from continuing operations of $0.48 per share (diluted) compared to earnings from continuing operations of $2.06 per share (diluted) in the prior year period. The current year earnings from continuing operations before income taxes were $127 million, compared to $376 million in the third quarter of 2020 which included an approximately $280 million net gain on the sale of O-I’s ANZ business unit.
Adjusted Earnings1: Excluding certain items management considers not representative of ongoing operations, third quarter 2021 adjusted earnings1 were $0.58 per share compared with the prior year of $0.41 per share. Higher adjusted earnings were primarily the result of improved production volumes as well as strong operating and cost performance. Actual results exceeded management’s earnings guidance of $0.47 to $0.52.
Segment Operating Profit1: Third quarter 2021 segment operating profit was $243 million compared to $204 million in the prior year period. While demand for glass containers remains strong, sales volumes (excluding divestitures) declined approximately 1 percent from the prior year. Higher segment operating profit was largely due to higher production levels, as well as strong operating performance and the benefits from the company’s margin expansion initiatives.
Cash Flows: Cash provided by continuing operating activities was $306 million in the third quarter 2021, compared to $262 million in the prior year period. Third quarter 2021 free cash flow1 was $213 million compared to $205 million in 2020.
Capital Structure: Total debt was $4.9 billion on September 30, 2021, compared to $5.4 billion on September 30, 2020. Net debt1 was $4.3 billion on September 30, 2021, which was down nearly $500 million from the prior year. Committed liquidity remained strong and approximated $2.1 billion on September 30, 2021.

Net sales approximated $1.6 billion in the third quarter of 2021, which was down slightly compared to the prior year period due to recent divestitures that reduced revenue by $59 million. Higher average selling prices contributed $57 million to net sales. Adjusted for divestitures, shipments in tons decreased 1 percent which impacted revenues $16 million. Net sales benefited $15 million from favorable foreign currency translation, while revenue from technical services declined $4 million reflecting lower engineering project activity.

In both the third quarter of 2021 and 2020, the company recorded several significant items impacting reported results as presented in the table entitled Reconciliation to Adjusted Earnings. Management considers these items not representative of ongoing operations, and they are excluded from adjusted earnings. In the third quarter of 2021, these items included $12 million for restructuring and other charges and $5 million in pension settlement charges. In the third quarter of 2020, these items included approximately $280 million for the gain on the sale of the ANZ business, $9 million for restructuring, asset impairment and other costs, $6 million for debt refinancing expense and $3 million in strategic transaction costs.
details at: http://investors.o-i.com/news-releases/news-release-details/o-i-glass-reports-strong-third-quarter-2021-results

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