FOR IMMEDIATE RELEASE
O-I REPORTS SECOND
QUARTER 2013 RESULTS
Earnings on par with prior year
as benefits from footprint optimization offset
soft demand
PERRYSBURG, Ohio (July 24, 2013)
- Owens-Illinois, Inc. (NYSE: OI) today reported financial
results for the second quarter ending June 30, 2013.
Highlights
-
Second quarter 2013
earnings from continuing operations attributable to the Company
were $0.81 per share (diluted), compared with $0.81 per share in
the same period of 2012. [1]
-
Operating profits in Europe and
Asia Pacific were higher, primarily driven by the benefits of
ongoing footprint optimization.
-
Global volumes were down
approximately 1 percent. Wine gains in all regions were more
than offset by softness in beer markets.
-
The Company reaffirms its full
year 2013 free cash flow outlook of at least $300
million.
Commenting on the Company's second quarter
results, Chairman and Chief Executive Officer Al Stroucken said,
"The Company performed in line with our expectations,
notwithstanding weaker than expected demand. We are squarely
focused on execution, especially asset optimization and wine share
recovery in Europe, as well as labor productivity savings in North
America. These actions are allowing us to achieve our targets
despite headwinds."
Operational
highlights
Net sales in the second quarter of 2013 were $1.78 billion, similar
to the prior year second quarter. Volume, in terms of tonnes
shipped, decreased by 1 percent year-over-year. Unfavorable weather
conditions in Europe and North America, as well as macroeconomic
pressures in South America, led to lower beer volumes globally.
This was partially offset by global gains in wine and double digit
growth overall in Southeast Asia. The 2 percent increase in sales
prices globally offset cost inflation.
In the second quarter of 2013, segment operating
profit was $267 million, in line with the prior year. The Company
achieved improved profitability in Europe and Asia Pacific due to
ongoing actions to optimize its footprint. South America's profit
was negatively impacted by a higher level of planned furnace
rebuilds.
Financial
highlights
Net interest expense was $4 million lower than the prior year,
primarily due to debt reduction and lower interest rates as the
Company continues to strengthen its financial
flexibility.
The Company's leverage ratio (net debt to EBITDA) was 2.9 times at
the end of the second quarter of 2013, compared with 2.8 times in
the previous year quarter. The Company expects to improve its
leverage ratio to approximately 2.5 times by the end of the
year.
During the quarter, the Company continued to
execute on its capital allocation priorities by purchasing
approximately $10 million of outstanding stock.
Outlook
Commenting on the Company's outlook, Stroucken said, "Our plans
called for an environment marked by slow growth globally and
macroeconomic volatility. We are seeing just that, with modest
contraction in Europe, stability in North America, and slower
expansion in South America. Currency headwinds, however,
particularly in Brazil and Australia, are more pronounced than
expected.
"We will continue to execute on our priorities
that impact the bottom line in the near term, principally
structural cost reductions, asset optimization, and managing
production volatility. In the back half of the year, we expect
higher volumes globally, partly driven by our efforts to recapture
wine share in Europe. We remain steadfast in our commitment to
generate higher earnings and cash flow, and to allocate capital in
ways that enhance our financial flexibility and generate
shareholder value."
Management continues to expect free cash flow of
at least $300 million in 2013. The Company has tightened the
expected range of adjusted EPS in 2013 to $2.65 to $2.85 per share
based on results to date, aforementioned currency and macroeconomic
headwinds, and concerted management actions to reduce costs.
Note 1
The table below describes the items that management considers not
representative of ongoing operations.
$ Millions, except per-share amounts |
|
Three months ended June 30 |
|
|
2013 |
|
2012 |
|
Earnings |
EPS |
|
Earnings |
EPS |
Earnings from Continuing Operations
Attributable to the Company |
|
$135 |
$0.81 |
|
$134 |
$0.81 |
Items that management considers not
representative of ongoing operations consistent with Segment
Operating Profit |
|
|
|
|
|
|
Restructuring, asset impairment and related charges |
|
- |
- |
|
- |
- |
Charges for note repurchase premiums and write-off of
finance fees |
|
- |
- |
|
- |
- |
Adjusted Net Earnings |
|
$135 |
$0.81 |
|
$134 |
$0.81 |
$ Millions, except per-share amounts |
|
Six months ended June 30 |
|
|
2013 |
|
2012 |
|
Earnings |
EPS |
|
Earnings |
EPS |
Earnings from Continuing Operations
Attributable to the Company |
|
$214 |
$1.29 |
|
$256 |
$1.54 |
Items that management considers not
representative of ongoing operations consistent with Segment
Operating Profit |
|
|
|
|
|
|
Restructuring, asset impairment and related charges |
|
9 |
0.05 |
|
- |
- |
Charges for note repurchase premiums and write-off of
finance fees |
|
11 |
0.07 |
|
- |
- |
Adjusted Net Earnings |
|
$234 |
$1.41 |
|
$256 |
$1.54 |
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. With revenues of $7.0
billion in 2012, the Company is headquartered in Perrysburg, Ohio,
USA, and employs approximately 22,500 people at 79 plants in 21
countries. O-I delivers safe, sustainable, pure, iconic,
brand-building glass packaging to a growing global marketplace.
O-I's Glass Is Life(TM) movement promotes the widespread benefits
of glass packaging in key markets around the globe. For more
information, visit www.o-i.com or www.glassislife.com.
Regulation G
The information presented above regarding adjusted net earnings
relates to net earnings attributable to the Company exclusive of
items management considers not representative of ongoing operations
and does not conform to U.S. generally accepted accounting
principles (GAAP). It should not be construed as an alternative to
the reported results determined in accordance with GAAP. Management
has included this non-GAAP information to assist in understanding
the comparability of results of ongoing operations. Management uses
this non-GAAP information principally for internal reporting,
forecasting, budgeting and calculating compensation payments.
Further, the information presented above regarding free cash flow
does not conform to GAAP. Management defines free cash flow as cash
provided by continuing operating activities less capital spending
(both as determined in accordance with GAAP) and has included this
non-GAAP information to assist in understanding the comparability
of cash flows. Management uses this non-GAAP information
principally for internal reporting, forecasting and budgeting.
Management believes that the non-GAAP presentation allows the board
of directors, management, investors and analysts to better
understand the Company's financial performance in relationship to
core operating results and the business outlook.
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 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, specifically the
Euro, Brazilian real and Australian 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 the economic conditions in Australia,
Europe and South America disruptions in capital markets,
disruptions in the supply chain, competitive pricing pressures,
inflation or deflation, and changes in tax rates and laws, (4)
consumer preferences for alternative forms of packaging, (5) cost
and availability of raw materials, labor, energy and
transportation, (6) the Company's ability to manage its cost
structure, including its success in implementing restructuring
plans and achieving cost savings, (7) consolidation among
competitors and customers, (8) the ability of the Company to
acquire businesses and expand plants, integrate operations of
acquired businesses and achieve expected synergies, (9)
unanticipated expenditures with respect to environmental, safety
and health laws, (10) the Company's ability to further develop its
sales, marketing and product development capabilities, and (11) the
timing and occurrence of events which are beyond the control of the
Company, including any expropriation of the Company's operations,
floods and other natural disasters, events related to
asbestos-related claims, and the other risk factors discussed in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2012 and any subsequently filed Quarterly Report on
Form 10-Q. 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.
Conference call scheduled for
July 25, 2013
O-I CEO Al Stroucken and CFO Steve Bramlage will conduct a
conference call to discuss the Company's latest results on
Thursday, July 25, 2013, at 8:00 a.m., Eastern Time. 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
Presentations & Webcast 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., Eastern Time, on July 25. 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 90 days following the
call.
Contact: Erin
Crandall, 567-336-2355 - O-I Investor Relations
Lisa Babington, 567-336-1445 - O-I Corporate
Communications
O-I news releases are available on the O-I website
at www.o-i.com.
O-I's third quarter 2013 earnings conference call
is currently scheduled for Thursday, October 31, 2013, at 8:00
a.m., Eastern Time.
[1] In the second quarter of 2013 and the corresponding period
of 2012, adjusted earnings were equal to GAAP earnings. Adjusted
earnings refers to earnings from continuing operations attributable
to the Company, excluding items management does not consider
representative of ongoing operations, as cited in Note 1 in this
release.
O-I Second Quarter Earnings
Release
O-I Second Quarter 2013 Earnings Presentation
This
announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: Owens-Illinois, Inc. via Thomson Reuters ONE
HUG#1718548
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