O-I Glass(OI) - 2025 Q2 - Quarterly Results

Executive Summary Q2 2025 Performance Highlights O-I Glass delivered strong Q2 2025 adjusted earnings growth of 20% year-over-year from 'Fit to Win' initiatives, despite a significant decline in reported earnings Q2 2025 Key Performance Metrics | Metric | 2Q25 ($) | 2Q24 ($) | YoY Change | | :-------------------------------------------------- | :----- | :--- | :--------- | | Reported Net Earnings (Loss) Attributable to the Company Per Share (Diluted) | $(0.03) | $0.36 | -108.33% | | Reported Earnings Before Income Taxes ($M) | $7 | $104 | -93.27% | | Adjusted Earnings Per Share (Diluted) (Non-GAAP) | $0.53 | $0.44 | +20.45% | | Segment Operating Profit (Non-GAAP) ($M) | $225 | $233 | -3.43% | - Year-to-date, 'Fit to Win' benefits reached $145 million, offsetting macroeconomic softness[3] Full-Year 2025 Outlook Update O-I Glass raised its full-year 2025 adjusted earnings guidance, reflecting strong year-to-date performance and 'Fit to Win' momentum, while maintaining free cash flow guidance Full-Year 2025 Guidance | Metric | 2025 Guidance (Current) ($) | 2025 Guidance (Previous) ($) | 2024 Actual ($) | Projected YoY Improvement (2025 vs 2024) | | :-------------------------- | :-------------------------- | :--------------------------- | :-------------- | :--------------------------------------- | | Adjusted Earnings Per Share (EPS) | $1.30 - $1.55 | $1.20 - $1.50 | $0.81 | 60% - 90% | | Free Cash Flow – Source / (Use) ($M) | $150 - $200 | $150 - $200 | $(128) | ~$300M improvement | - Full-year 2025 sales volumes are expected to be in line with prior year levels[11] - Free cash flow guidance includes $140 million to $150 million in cash restructuring costs[11] Strategic and Operational Developments O-I Glass halted MAGMA development due to insufficient returns, shifting to a 'Best at Both' operations strategy and planning further capacity optimization in the Americas segment - MAGMA development and operations have been halted due to not meeting operational or financial return requirements[3] - The company will pursue a 'Best at Both' operations strategy for higher premium output at lower operating cost and capital intensity[3] - The Bowling Green facility will be reconfigured into a best-cost, premium-focused operation[3] - Plans include indefinite suspension of one furnace and closure of one plant in the Americas, expecting approximately $45 million in Q3 2025 charges[13] Second Quarter 2025 Financial Review Consolidated Results O-I Glass reported consistent net sales but a substantial decline in reported earnings due to $108 million in MAGMA-related restructuring charges, while adjusted EPS increased Q2 2025 Consolidated Financial Results | Metric | 2Q25 ($M) | 2Q24 ($M) | YoY Change | | :------------------------------------ | :-------- | :-------- | :--------- | | Net Sales | $1,706 | $1,729 | -1.33% | | Earnings before income taxes ($M) | $7 | $104 | -93.27% | | Net earnings (loss) attributable to the Company ($M) | $(5) | $57 | -108.77% | | Diluted EPS ($) | $(0.03) | $0.36 | -108.33% | | Adjusted EPS (Non-GAAP) ($) | $0.53 | $0.44 | +20.45% | - Net Sales benefited from favorable currency translation, offset by slightly lower selling prices and an approximately 3% decline in shipment volume[5] - Earnings before income taxes declined primarily due to $108 million in restructuring and asset impairment charges from the MAGMA program discontinuation[6] - Retained corporate and other costs improved to $25 million from $32 million year-over-year, reflecting 'Fit to Win' benefits[8] Segment Performance Overall segment operating profit modestly declined, with strong growth in Americas driven by 'Fit to Win' and volume, offset by Europe's significant decline from unfavorable pricing, reduced volume, and higher costs Q2 2025 Segment Operating Profit | Metric | 2Q25 ($M) | 2Q24 ($M) | YoY Change | | :---------------------- | :-------- | :-------- | :--------- | | Segment Operating Profit | $225 | $233 | -3.43% | | Americas Segment Operating Profit | $135 | $106 | +27.36% | | Europe Segment Operating Profit | $90 | $127 | -29.13% | Americas Segment Americas segment operating profit significantly rose due to substantial 'Fit to Win' cost reductions and 4% sales volume growth, despite unfavorable currency and slightly lower net prices Q2 2025 Americas Segment Performance | Metric | 2Q25 ($M) | 2Q24 ($M) | YoY Change | | :-------------------------------- | :-------- | :-------- | :--------- | | Americas Net Sales | $943 | $899 | +4.89% | | Americas Segment Operating Profit ($M) | $135 | $106 | +27.36% | | Americas Segment Operating Profit Margin (%) | 14.3% | 11.8% | +2.5 pp | - Operating profit increased due to significant 'Fit to Win' cost reductions and 4% sales volume growth[12] - Gains were partially offset by unfavorable currency translation and slightly lower net price[12] Europe Segment Europe segment operating profit declined due to unfavorable net price, an approximately 9% drop in sales volume, and higher operating costs from production curtailments, partially mitigated by 'Fit to Win' savings Q2 2025 Europe Segment Performance | Metric | 2Q25 ($M) | 2Q24 ($M) | YoY Change | | :------------------------------ | :-------- | :-------- | :--------- | | Europe Net Sales | $741 | $802 | -7.59% | | Europe Segment Operating Profit ($M) | $90 | $127 | -29.13% | | Europe Segment Operating Profit Margin (%) | 12.1% | 15.8% | -3.7 pp | - Operating profit decreased primarily due to unfavorable net price, an approximately 9% drop in sales volume, and higher operating costs[12] - Higher operating costs resulted from increased temporary production curtailments aimed at reducing inventory[12] - Headwinds were partially mitigated by 'Fit to Win' savings and favorable currency translation[12] Condensed Consolidated Financial Statements Results of Operations O-I Glass reported a Q2 2025 net loss of $5 million, a significant decline from prior year earnings, primarily due to increased 'Other expense, net' including restructuring charges, with slightly decreased net sales Q2 2025 Condensed Consolidated Results of Operations | Metric | Three months ended June 30, 2025 ($M) | Three months ended June 30, 2024 ($M) | YoY Change | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :--------- | | Net sales | $1,706 | $1,729 | -1.33% | | Gross profit ($M) | $299 | $303 | -1.32% | | Selling and administrative expense ($M) | $(106) | $(110) | -3.64% | | Research, development and engineering expense ($M) | $(11) | $(20) | -45.00% | | Interest expense, net ($M) | $(85) | $(87) | -2.30% | | Equity earnings ($M) | $28 | $30 | -6.67% | | Other expense, net ($M) | $(118) | $(12) | +883.33% | | Earnings before income taxes ($M) | $7 | $104 | -93.27% | | Provision for income taxes ($M) | $(6) | $(42) | -85.71% | | Net earnings (loss) ($M) | $1 | $62 | -98.39% | | Net earnings (loss) attributable to the Company ($M) | $(5) | $57 | -108.77% | | Diluted earnings per share ($) | $(0.03) | $0.36 | -108.33% | Balance Sheets As of June 30, 2025, total assets slightly decreased due to lower cash and inventories, while trade receivables increased; total liabilities also decreased, leading to lower share owners' equity Condensed Consolidated Balance Sheets | Metric | June 30, 2025 ($M) | June 30, 2024 ($M) | YoY Change | | :-------------------------------- | :----------------- | :----------------- | :--------- | | Total assets ($M) | $9,179 | $9,334 | -1.66% | | Cash and cash equivalents ($M) | $487 | $671 | -27.42% | | Trade receivables, net ($M) | $848 | $725 | +16.97% | | Inventories ($M) | $990 | $1,153 | -14.14% | | Property, plant and equipment, net ($M) | $3,458 | $3,465 | -0.20% | | Total current liabilities ($M) | $2,102 | $2,234 | -5.82% | | Long-term debt ($M) | $4,898 | $4,648 | +5.38% | | Share owners' equity ($M) | $1,369 | $1,631 | -16.06% | Cash Flows For the six months ended June 30, 2025, cash utilized in operating activities slightly improved, while cash utilized in investing and financing activities significantly decreased Condensed Consolidated Statements of Cash Flows | Metric | Six months ended June 30, 2025 ($M) | Six months ended June 30, 2024 ($M) | YoY Change | | :------------------------------------------ | :---------------------------------- | :---------------------------------- | :--------- | | Net earnings (loss) ($M) | $(10) | $138 | -107.25% | | Cash provided by (utilized in) operating activities ($M) | $(16) | $(20) | +20.00% | | Cash utilized in investing activities ($M) | $(221) | $(380) | -41.84% | | Cash provided by (utilized in) financing activities ($M) | $(47) | $180 | -126.11% | | Cash at end of period ($M) | $487 | $671 | -27.42% | - Cash payments for property, plant and equipment decreased from $373 million in H1 2024 to $239 million in H1 2025[32] - Non-cash restructuring, asset impairment, and related charges were $195 million for H1 2025, compared to none in the prior year[32] Non-GAAP Financial Measures and Reconciliations Adjusted Earnings Reconciliation O-I Glass reconciles net earnings to adjusted earnings by excluding non-recurring items like restructuring and environmental charges; Q2 2025 saw $86 million in adjusting items, resulting in $82 million adjusted earnings Adjusted Earnings Reconciliation | Metric | Three months ended June 30, 2025 ($M) | Three months ended June 30, 2024 ($M) | YoY Change | | :---------------------------------------------------------------- | :------------------------------------ | :------------------------------------ | :--------- | | Net earnings (loss) attributable to the Company ($M) | $(5) | $57 | -108.77% | | Restructuring, asset impairment and other charges (impacting other income (expense), net) ($M) | $108 | $0 | N/A | | Legacy environmental charge ($M) | $0 | $10 | -100.00% | | European investment tax incentive ($M) | $(22) | $0 | N/A | | Total adjusting items (non-GAAP) ($M) | $86 | $12 | +616.67% | | Adjusted earnings (non-GAAP) ($M) | $82 | $69 | +18.84% | | Adjusted earnings per share (non-GAAP) ($) | $0.53 | $0.44 | +20.45% | - A quantitative reconciliation of forward-looking adjusted earnings to GAAP is not feasible due to the inability to reliably predict all necessary components[41] Free Cash Flow Reconciliation O-I Glass forecasts full-year 2025 free cash flow between $150 million and $200 million, a significant improvement from the negative $128 million in 2024 Free Cash Flow Reconciliation and Forecast | Metric | Forecast for Year Ended December 31, 2025 ($M) | Year Ended December 31, 2024 ($M) | YoY Change | | :------------------------------------ | :--------------------------------------------- | :-------------------------------- | :--------- | | Cash provided by operating activities ($M) | $600 | $489 | +22.70% | | Cash payments for property, plant and equipment ($M) | $(400) - $(450) | $(617) | -27.07% to -35.17% | | Free cash flow (non-GAAP) ($M) | $150 - $200 | $(128) | N/A (significant improvement) | Adjusted Effective Tax Rate Reconciliation A quantitative reconciliation for the forward-looking non-GAAP adjusted effective tax rate is not provided due to the inherent unpredictability of GAAP components like restructuring and asset impairment charges - A quantitative reconciliation of the forward-looking adjusted effective tax rate to GAAP is not provided due to the inability to reliably predict all necessary components[45] - Significant items such as restructuring and asset impairment charges are complex and unpredictable, making their income tax impact difficult to forecast[45] Additional Information About O-I Glass O-I Glass, Inc. is a leading global producer of sustainable glass packaging, with $6.5 billion in 2024 net sales, operating 69 plants in 19 countries with 21,000 employees - O-I Glass, Inc. is a leading global producer of glass bottles and jars[19] - Glass is highlighted as a pure, healthy, and completely recyclable, making it the most sustainable rigid packaging material[19] - In 2024, O-I achieved net sales of $6.5 billion with approximately 21,000 employees across 69 plants in 19 countries[19] Non-GAAP Financial Measures Disclosure O-I Glass uses non-GAAP measures like adjusted earnings and free cash flow to provide supplemental financial information, excluding non-recurring items for a clearer view of core operations, always supplemental to GAAP - The company uses non-GAAP financial measures including adjusted earnings, adjusted EPS, free cash flow, segment operating profit, and adjusted effective tax rate[20] - These measures provide supplemental financial information by excluding items not reflective of the company's principal business activity[20][21] - Non-GAAP measures are reconciled to GAAP and should be considered supplemental, not in isolation or more important than comparable GAAP measures[20] Forward-Looking Statements This press release contains forward-looking statements reflecting O-I Glass's expectations, which involve inherent uncertainty and risk, as actual financial performance may differ due to various factors including economic conditions and strategic initiatives - Forward-looking statements reflect current expectations and projections about future events, involving inherent uncertainty and risk[24] - Future financial performance may differ due to factors including 'Fit to Win' benefits, economic conditions, raw material costs, competitive pressures, and MAGMA discontinuation impacts[25] - The company does not assume any obligation to update or supplement any forward-looking statements in this document[26]