O-I Continues to Build Momentum on Its Transformational Journey
(Thomson Reuters ONE) -
FOR IMMEDIATE RELEASE
For more information, contact:
Sasha Sekpeh
O-I Investor Relations
(567) 336-5128
alexandra.sekpeh(at)o-i.com
O-I Continues to Build Momentum on Its Transformational Journey
PERRYSBURG, Ohio (Dec. 20, 2016) - Owens-Illinois, Inc. (NYSE: OI) today
announced several significant developments in the transformational journey that
the Company outlined at investor day earlier this year. The initial phase of the
journey has been focused on enhancing financial flexibility through proactive
liability management as well as stabilizing and improving top and bottom line
business performance.
The Company has substantially improved its debt profile through the recent
issuance of a 500 million euro, eight-year, fixed-rate bond with a very
favorable coupon of 3.125 percent. This transaction met all key objectives:
increased the composition of fixed-rate debt to nearly two-thirds, augmented
the natural hedge to foreign currency exposure, repaid higher-cost floating-rate
debt and extended the Company's debt maturity profile.
Further, the Company continues to de-risk its pension plans. The Company
recently settled approximately $200 million in pension obligations of the Owens-
Illinois Hourly Retirement Plan ("Plan").[1] This transaction occurred via the
purchase of a group annuity contract with The Prudential Insurance Company of
America, a subsidiary of Prudential Financial, Inc. (NYSE:PRU) using Plan assets
that will transfer payment responsibility for retirement benefits owed to
approximately 7,500 U.S. retirees and their beneficiaries. This settlement will
reduce the Plan's pension obligations by 10 to 15 percent.
The Company also continues to reduce its asbestos-related liabilities. The
Company reported a total asbestos-related liability of $817 million on its
balance sheet at year end 2015. During 2016, asbestos payments of approximately
$125 million will reduce this liability to less than $700 million. The Company
has preliminarily concluded that there will be no adjustment to the asbestos-
related liability in 2016. Next year, expected payments of approximately $115
million will further decrease the liability.
Separately, the Company's strategic initiatives, particularly those related to
manufacturing, remain a strong contributor to year-on-year operating profit
gains. The Company continues to pivot towards the benefits of the supply chain
and commercial initiatives that will drive incremental improvements in the next
phase of the transformational journey. Regarding the top line, the Company
launched its key account management effort to positively impact relationships
with customers by adopting service levels and integrating Company resources
aligned to the needs of key clients. These efforts are paying off. O-I has
renewed global agreements with several strategic customers, which fortifies
management's confidence in volume growth in 2017. Collaborative innovation is
also taking hold. In Latin America, O-I launched commercial sales of red glass.
In North America in the coming year, O-I is expected to launch sales of the
Helix screw cork bottle, created in partnership with cork manufacturer Amorim.
Jan Bertsch, chief financial officer, said, "We are very pleased with the
progress we are making in achieving our short and long-term financial goals. As
we wrap up 2016, we expect to be solidly within our guidance range for adjusted
earnings.[2] And, excluding asbestos payments, which relate to a legacy
liability and not to the ongoing glass container operations, our adjusted free
cash flow(2) for full year 2016 would be approximately $425 million. This
provides a better view of the cash generation potential of our business
segments. Looking into next year and even into 2018, we anticipate the Company's
financial performance will be entirely consistent with the key investor day
metrics: continued margin expansion, 10 percent CAGR in adjusted earnings, and
solid cash flow generation."
###
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. The Company had revenues of $6.2 billion in 2015 and employs
27,000 people at 80 plants in 23 countries. With global headquarters in
Perrysburg, Ohio, O-I delivers safe, sustainable, pure, iconic, brand-building
glass packaging to a growing global marketplace. For more information, visit o-
i.com.
Non-GAAP Financial Measures
Management believes that its presentation and use of certain non-GAAP financial
measures, including adjusted EPS and adjusted free cash flow, provide relevant
and useful information, which is widely used by analysts, investors and
competitors in the industry, as well as by management in assessing both
consolidated and business unit performance. The information presented regarding
adjusted EPS relates to net earnings from continuing operations attributable to
the Company, exclusive of items management considers not representative of
ongoing operations because such items are not reflective of the normal earnings
of the business, divided by weighted average shares outstanding (diluted).
Management has included adjusted EPS to assist in understanding the
comparability of results of ongoing operations. Further, the information
presented regarding adjusted free cash flow relates to cash provided by
continuing operating activities less capital spending plus asbestos-related
payments and management has included adjusted free cash flow to assist in
understanding the comparability of cash flows generated by the Company's
principal business activity, which is glass container production. It should not
be inferred that the entire adjusted free cash flow amount is available for
discretionary expenditures. Management uses non-GAAP information principally for
internal reporting, forecasting, budgeting and calculating compensation
payments. 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 relation to core operating results and the business
outlook. These non-GAAP measures should be considered supplemental in nature and
should not be considered in isolation or be construed as being more important
than comparable GAAP measures.
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, as amended (the "Exchange
Act") 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) the Company's ability to integrate the Vitro Business in a timely
and cost effective manner, to maintain on existing terms the permits, licenses
and other approvals required for the Vitro Business to operate as currently
operated, and to realize the expected synergies from the Vitro Acquisition, (2)
risks related to the impact of integration of the Vitro Acquisition on earnings
and cash flow, (3) risks associated with the significant transaction costs and
additional indebtedness that the Company incurred in financing the Vitro
Acquisition, (4) the Company's ability to realize expected growth opportunities
and cost savings from the Vitro Acquisition, (5) foreign currency fluctuations
relative to the U.S. dollar, specifically the Euro, Brazilian real, Mexican
peso, Colombian peso and Australian dollar, (6) changes in capital availability
or cost, including interest rate fluctuations and the ability of the Company to
refinance debt at favorable terms, (7) the general political, economic and
competitive conditions in markets and countries where the Company has
operations, including uncertainties related to economic and social conditions,
disruptions in capital markets, disruptions in the supply chain, competitive
pricing pressures, inflation or deflation, and changes in tax rates and laws,
(8) impacts from the United Kingdom's referendum of withdrawal from the European
Union on foreign currency exchange rates and the Company's business, (9)
consumer preferences for alternative forms of packaging, (10) cost and
availability of raw materials, labor, energy and transportation, (11) the
Company's ability to manage its cost structure, including its success in
implementing restructuring plans and achieving cost savings, (12) consolidation
among competitors and customers, (13) the Company's ability to acquire
businesses and expand plants, integrate operations of acquired businesses and
achieve expected synergies, (14) unanticipated expenditures with respect to
environmental, safety and health laws, (15) the Company's ability to further
develop its sales, marketing and product development capabilities, (16) 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, (17) the Company's
ability to accurately estimate its total asbestos-related liability, and (18)
the Company's ability to successfully remediate the material weakness in its
internal control over financial reporting, and the other risk factors discussed
in the Company's Amendment No. 1 to the Annual Report on Form 10-K/A for the
year ended December 31, 2015 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.
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[1] The Company expects to recognize a non-cash charge in the fourth quarter
related to pension settlement charges associated with the Plan. This charge will
not impact adjusted earnings nor will the transaction affect the Company's cash
flow generation.
[2] Adjusted earnings per share and adjusted free cash flow are non-GAAP
financial measures. See tables included in this release for reconciliations to
the most directly comparable GAAP measures.
O-I Continues to Build Momentum on Its Transformational Journey:
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This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Owens-Illinois, Inc. via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 20.12.2016 - 22:30 Uhr
Sprache: Deutsch
News-ID 514176
Anzahl Zeichen: 13197
contact information:
Town:
Perrysburg, OH
Kategorie:
Business News
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