O-I REPORTS THIRD QUARTER 2013 RESULTS Strong operating performance and volume growth drive higher earnings
(Thomson Reuters ONE) -
FOR IMMEDIATE RELEASE
O-I REPORTS THIRD QUARTER 2013 RESULTS
Strong operating performance and volume growth drive higher earnings
PERRYSBURG, Ohio (Oct. 30, 2013) - Owens-Illinois, Inc. (NYSE: OI) today
reported financial results for the third quarter ending September 30, 2013.
Highlights
* Third quarter 2013 earnings from continuing operations attributable to the
Company were $0.79 per share (diluted), compared with $0.55 per share in the
same period of 2012. Excluding certain items management considers not
representative of ongoing operations, adjusted earnings[1] were $0.79 per
share compared with $0.69 per share in the prior year.
* Global volumes, up 2%, were higher year-on-year for the first time in seven
quarters.
* Operating profit margin expanded more than 180 basis points in Europe and
North America driven by sales volume gains, cost savings and, for Europe,
higher production.
* South America's profit contracted due to lower demand, principally in the
Andean countries, and due to the impact of currency headwinds.
* The Company reaffirms its full year 2013 free cash flow outlook of at least
$300 million.
Commenting on the Company's third quarter results, Chairman and Chief Executive
Officer Al Stroucken said, "Overall, our operations delivered strong results for
the quarter, and we again benefited from our broad geographic footprint. Growth
in sales volume in Europe, North America and Asia Pacific outweighed the decline
in South America. We are on track with our global structural cost reduction and
European asset optimization programs, both of which continue to deliver
benefits. And we continued with our disciplined approach to capital allocation,
as evidenced by our share repurchases and debt pay-down in the quarter."
Operational highlights
Net sales in the third quarter of 2013 were $1.78 billion, up 2 percent over the
prior year third quarter. Price increased modestly for the Company. Currency was
a headwind as the weakened Brazilian real and Australian dollar more than offset
a stronger Euro.
Volume, in terms of tonnes shipped, increased 2 percent year-over-year. Europe
volume increased 7 percent on growth in wine, food and beer. The Company's
efforts to win back wine customers continued to show traction across Southern
Europe. A delayed harvest in Europe shifted volumes into the third quarter,
allowing food volumes to record double-digit gains.
Following adverse weather in the second quarter, beer volumes in the third
quarter increased year-on-year in both Europe and North America. Volume growth
in North America was also driven by non-alcoholic beverages. In South America, a
broad macroeconomic slowdown and a general strike in Colombia dampened demand.
Segment operating profit was $259 million, up nearly 6 percent over prior year
third quarter. The Company achieved improved profitability from increased sales
and production volumes, particularly in Europe, as well as reduced structural
costs.
Financial highlights
Net interest expense was $5 million lower than the prior year, primarily due to
lower interest rates and to the Company's ongoing efforts to reduce debt.
The Company's leverage ratio (net debt to EBITDA) was 2.9 times at the end of
the third quarter of 2013. 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 repurchasing approximately $10 million of outstanding stock and
repaying $168 million in debt.
Outlook
Commenting on the Company's outlook for the fourth quarter, Stroucken said, "We
expect market demand in North America and Europe to be sluggish, but stable. As
we have limited visibility into the uncertain macroeconomic conditions in South
America, our plans anticipate no growth there in the fourth quarter.
Irrespective of external challenges, we are focusing on the levers within our
control: managing production volatility, reducing structural costs and
optimizing our assets. We are confident, therefore, that we will deliver higher
full year earnings and free cash flow."
The Company continues to expect an adjusted EPS range in 2013 of $2.65 to $2.85
per share and free cash flow of at least $300 million for the year.
Note 1
The table below describes the items that management considers not representative
of ongoing operations.
Three months ended September 30
$ Millions, except per-share amounts
--------------------------------
2013 2012
---------------- ---------------
Earnings EPS Earnings EPS
---------------- ---------------
Earnings from Continuing Operations $132 $0.79 $92 $0.55
Attributable to the Company
Items that management considers not
representative of ongoing operations
consistent with Segment Operating Profit
Restructuring, asset impairment and related - - 23 0.14
charges
Charges for note repurchase premiums and - - - -
write-off of finance fees
Adjusted Net Earnings $132 $0.79 $115 $0.69
Nine months ended September 30
$ Millions, except per-share amounts
--------------------------------
2013 2012
---------------- ---------------
Earnings EPS Earnings EPS
---------------- ---------------
Earnings from Continuing Operations $346 $2.08 $348 $2.10
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 23 0.14
charges
Charges for note repurchase premiums and 11 0.07 - -
write-off of finance fees
Adjusted Net Earnings $366 $2.20 $371 $2.24
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 October 31, 2013
O-I CEO Al Stroucken and CFO Steve Bramlage will conduct a conference call to
discuss the Company's latest results on Thursday, October 31, 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 October
31. 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 fourth quarter 2013 earnings conference call is currently scheduled for
Wednesday, January 29, 2014, 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.
3Q13 Earnings Release:
http://hugin.info/150659/R/1739410/583782.pdf
3Q13 Earnings Presentation:
http://hugin.info/150659/R/1739410/583779.pdf
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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#1739410]
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Datum: 30.10.2013 - 21:04 Uhr
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News-ID 311187
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contact information:
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