O-I REPORTS FIRST QUARTER 2013 RESULTS Price gains and structural cost reductions partially offset lower shipments, particularly in Europe
(Thomson Reuters ONE) -
FOR IMMEDIATE RELEASE
O-I REPORTS FIRST QUARTER 2013 RESULTS
Price gains and structural cost reductions partially offset
lower shipments, particularly in Europe
PERRYSBURG, Ohio (April 23, 2013) - Owens-Illinois, Inc. (NYSE: OI) today
reported financial results for the first quarter ending March 31, 2013.
Highlights
* First quarter 2013 earnings from continuing operations attributable to the
Company were $0.48 per share (diluted), compared with $0.73 per share in the
same period of 2012. Excluding certain items management considers not
representative of ongoing operations, adjusted earnings[1] were $0.60 per
share, compared with $0.73 per share in the prior year.
* Higher operating profits in South America and Asia Pacific were more than
offset by lower results in Europe. South America benefited from volume
growth and logistics savings from a new furnace brought online in Brazil in
late 2012. As expected, European operating profit was adversely impacted by
lower demand and efforts to normalize production levels over the course of
2013.
* Price and product mix increased 2 percent year on year, with gains reported
in all regions. Price increases covered cost inflation.
Commenting on the Company's first quarter results, Chairman and Chief Executive
Officer Al Stroucken said, "We are pleased with our performance overall. Our
price increases continue to cover cost inflation. We are clearly seeing the
financial benefits of our global structural cost reductions, as well as the
impact of our growth strategy on South America's rising profitability. Yet we
faced lower demand, as expected, particularly in economically troubled Europe.
Our initiative to mitigate production volatility over the course of the year was
a planned headwind in the first quarter, but will benefit us in the second half
of the year."
Operational highlights
Net sales in the first quarter of 2013 were $1.64 billion, down from $1.74
billion in the prior year first quarter. Currency translation adversely impacted
sales by 2 percent. Volume, in terms of tonnes shipped, decreased by 5 percent
year-over-year. The decline in volume was most pronounced in Europe, due to
difficult macroeconomic conditions, the absence of major sporting events that
occurred in the prior year and the share shift to smaller competitors in
response to the Company's pricing strategy in 2012. South America reported
modest volume growth, driven by food packaging. Sales prices globally were up 2
percent, with successful price initiatives reported in all regions.
In the first quarter of 2013, segment operating profit was $226 million, down
from $260 million in the prior year. The Company curtailed production,
particularly in Europe, as part of an initiative to reduce production volatility
over the course of the year. This led to lower absorption of fixed costs, and
therefore lower profitability, relative to the comparable period in the prior
year. The Company expects improved profitability from this initiative in the
latter half of the year. Structural cost reductions partially compensated for
the adverse impact of lower production and sales volume.
Financial highlights
Net interest expense[2] was $4 million lower than the prior year, primarily due
to debt reduction and lower interest rates. In the quarter, the Company
completed a Euro debt refinancing transaction that reduces ongoing interest
expense and extends our maturity horizon.
The Company's leverage ratio (net debt to EBITDA) was 2.9 at the end of the
first quarter of 2013, compared with 3.0 times EBITDA in the previous year
quarter. The Company expects further improvement in its leverage ratio during
2013.
In the first quarter of 2013, the Company recorded two charges to reported
results that are presented in Note 1 below. Management considers these charges
not representative of ongoing operations.
Outlook
Commenting on the Company's outlook for the second quarter of 2013, Stroucken
said, "We expect continued volume growth in our emerging regions and stable
market conditions in North America. While persistent macroeconomic challenges in
Europe limit our visibility, we expect flat year-on-year shipments there. We are
focused on structural cost reduction initiatives and our European asset
optimization program, which are key drivers within our control that will grow
free cash flow and earnings."
Management reaffirms expectations for 2013 free cash flow (at least $300
million) and adjusted earnings ($2.60 to $3.00 per share).
Note 1
The table below describes the items that management considers not representative
of ongoing operations.
Three months ended March 31
$ Millions, except per-share amounts
--------------------------------
2013 2012
---------------- ---------------
Earnings EPS Earnings EPS
---------------- ---------------
Earnings from Continuing Operations $79 $0.48 $122 $0.73
Attributable to the Company
Items that management considers not
representative of ongoing operations
consistent with Segment Operating Profit
Restructuring, asset impairment and related 9 0.05
charges
Charges for note repurchase premiums and 11 0.07
write-off of finance fees
Adjusted Net Earnings $99 $0.60 $122 $0.73
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 Europe
and Australia, 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 April 24, 2013
O-I CEO Al Stroucken and CFO Steve Bramlage will conduct a conference call to
discuss the Company's latest results on Wednesday, April 24, 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 April
24. 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 second quarter 2013 earnings conference call is currently scheduled for
Thursday, July 25, 2013, at 8:00 a.m., Eastern Time.
[1] 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.
[2] Excluding charges of $11 million during the first quarter of 2013 for note
repurchase premiums and the write-off of finance fees related to debt that was
repaid prior to its maturity.
First Quarter 2013 Earnings Release:
http://hugin.info/150659/R/1695446/557896.pdf
1Q13 Earnings Presentation:
http://hugin.info/150659/R/1695446/557897.pdf
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#1695446]
Unternehmensinformation / Kurzprofil:
Datum: 23.04.2013 - 22:04 Uhr
Sprache: Deutsch
News-ID 252193
Anzahl Zeichen: 14589
contact information:
Town:
Perrysburg, OH
Kategorie:
Business News
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