O-I REPORTS FIRST QUARTER 2017 RESULTS; Continued strong financial performance driven by volume growth and focus on cost improvement
(Thomson Reuters ONE) -
FOR IMMEDIATE RELEASE
O-I REPORTS FIRST QUARTER 2017 RESULTS
Continued strong financial performance
driven by volume growth and focus on cost improvement
PERRYSBURG, Ohio (Apr. 24, 2017) - Owens-Illinois, Inc. (NYSE: OI) today
reported financial results for the first quarter ended Mar. 31, 2017.
* For the first quarter, the Company recorded earnings from continuing
operations of $0.30 per share (diluted), compared with $0.42 per share in
2016. Improved segment operating profit was offset by higher charges
primarily related to restructuring and bond redemption fees.
* Excluding certain items management considers not representative of ongoing
operations, adjusted earnings[1] were $0.58 per share. This was up 21
percent compared with prior year and exceeded guidance of $0.50 to $0.55 per
share.
* Net sales were $1.6 billion, up 2 percent from the prior year first quarter.
Sales volume for the quarter was up 2 percent compared to the prior year,
partially driven by new business development. Europe, Asia Pacific and Latin
America each reported sales volume growth of more than 3 percent.
* Earnings from continuing operations before income taxes were $73 million for
the first quarter compared with $101 million for the same period in 2016.
* Segment operating profit of reportable segments(1) for the first quarter of
2017 was $218 million, an increase of 3 percent compared with prior year.
All regions except Latin America posted higher segment operating profit
compared with the first quarter of 2016. In Latin America, the benefit from
strong sales volume was more than offset by cost inflation, as expected.
* The Company continues to execute on its strategic initiatives focused on
commercial activities and end-to-end supply chain. The focus on total
systems cost is on track to yield $35 million to $45 million in segment
operating profit for the full year.
* The Company improved its debt profile in the first quarter by completing a
tender offer for its 7.80 percent Senior Debentures due in 2018 and expanded
its borrowings under the 3.125 percent Euro Bond the Company originally
issued in 2016. These transactions will reduce ongoing interest expense and
increase the Company's natural hedge against foreign currency exposure.
* The Company is maintaining its annual earnings and cash flow guidance.
"We are pleased to announce another quarter of positive progress on our
transformation and towards our investor day goals," said CEO Andres Lopez. "We
delivered organic sales growth and margin expansion through the disciplined
execution of our strategy. For the full year, we are committed to achieving
solid sales and earnings growth in line with our prior guidance and are
confident that the improved financial and operational stability we are achieving
will help us generate greater value for our shareholders."
First Quarter 2017 Results
For the first quarter 2017, earnings from continuing operations before income
taxes was $73 million, which was unfavorable by $28 million compared with the
same period in prior year. These figures include items that management considers
not representative of ongoing operations.[2] In the first quarter of 2017, the
Company incurred restructuring and other charges of $39 million, primarily
driven by restructuring activity in Europe and Latin America, and charges of $17
million related to debt redeemed in the quarter. In the first quarter of 2016,
the Company incurred net restructuring and other charges of $12 million.
Excluding certain items management considers not representative of ongoing
operations, adjusted earnings were $0.58 per share. Adjusted earnings increased
21 percent, or $17 million compared with prior year. The improvement is
primarily related to stronger business performance, lower corporate and other
costs and reduced interest expense.
Net sales in the first quarter of 2017 were $1.6 billion, up 2 percent from the
prior year first quarter primarily due to higher sales volumes. Price was up
less than one percent on a global basis, while currency translation adversely
impacted net sales by less than one percent.
Global sales volumes increased 2 percent compared to the first quarter of 2016.
Sales volume in Europe increased 4 percent, mainly due to higher beer shipments.
In Latin America, sales volume increased 3 percent due to stronger shipments -
primarily beer - in Mexico and the Andean region. North America sales volume
declined 2 percent, completely due to mix; shipments were similar to the prior
year with higher non-alcoholic beverage and spirits shipments offsetting lower
beer shipments. First quarter sales volume in Asia Pacific increased 4 percent
compared to the first quarter of 2016 mainly due to increased shipments of wine
in Australia and beer in Southeast Asia and the favorable geographic mix of
business.
Segment operating profit was $218 million in the first quarter, 3 percent higher
than prior year first quarter.
* Europe reported segment operating profit of $59 million, which was $4
million, or 7 percent higher than the prior year quarter. Price in the
region was down compared to first quarter of 2016 mainly due to the pass
through of 2016 cost deflation to customers under contractual price
adjustment formulas. This headwind was more than offset by the benefit of
higher sales volume, logistics savings and other cost reductions.
* Segment operating profit for North America was $85 million in the quarter.
This was $9 million higher than first quarter of 2016. Equity earnings from
the joint venture with Constellation Brands is being reported in North
America, rather than in Corporate, as of the beginning of 2017. The business
also benefited from the initiative to reduce total systems cost.
* Latin America reported segment operating profit of $54 million, below the
prior year quarter by $9 million. Strong shipments by Mexico and the Andean
region more than offset lower shipments in Brazil. However, as expected,
substantial cost inflation in Latin America negatively impacted costs.
* Segment operating profit in Asia Pacific was $20 million, up $3 million
compared with the first quarter of the prior year. The region benefited from
higher production volumes and cost containment efforts.
Retained corporate and other costs were $28 million in the first quarter and in
line with management expectations. This is an improvement of $4 million compared
with the prior year first quarter, primarily due to lower management incentive
accruals.
Net interest expense in the quarter was $78 million compared with $66 million
for the first quarter of 2016. Excluding the $17 million charge related to debt
redeemed in the quarter, net interest expense decreased $5 million from the
first quarter of the prior year primarily due to deleveraging and refinancing
actions taken in 2016.
Outlook
The Company is maintaining its annual guidance for earnings and cash flow.
The Company expects earnings from continuing operations attributable to the
company (diluted) for the full year 2017 to be in the range of $2.12 to $2.22
per share. Excluding certain items from the first quarter that management
considers not representative of ongoing operations, this equates to adjusted
earnings per share[3] for full year 2017 in the range of $2.40 to $2.50. The
Company continues to expect cash provided by continuing operating activities for
2017 to be approximately $730 million and adjusted free cash flow[4] to be
approximately $365 million. The earnings and cash flow guidance ranges reflect
uncertainty in macroeconomic conditions and currency rates, among other external
factors.
Conference Call Scheduled for Apr. 25, 2017
O-I CEO Andres Lopez and CFO Jan Bertsch will conduct a conference call to
discuss the Company's latest results on Tuesday, Apr. 25, 2017, at 8:00 a.m.
EDT. 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 Webcasts and Presentations 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. EDT, on Apr. 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 a year following the call.
Contact: Sasha Sekpeh, 567-336-5128 - O-I Investor Relations
Kristin Kelley, 567-336-2395 - 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 2017 earnings conference call is currently scheduled for
Tuesday, August 1, 2017, at 8:00 a.m. EDT.
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 $6.7 billion in 2016 and employs
more than 27,000 people at 79 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
The Company uses certain non-GAAP financial measures, which are measures of its
historical or future financial performance that are not calculated and presented
in accordance with GAAP, within the meaning of applicable SEC rules. Management
believes that its presentation and use of certain non-GAAP financial measures,
including adjusted earnings, adjusted earnings per share, segment operating
profit, segment operating profit margin and adjusted free cash flow, provide
relevant and useful supplemental financial information, which is widely used by
analysts and investors, as well as by management in assessing both consolidated
and business unit performance. These non-GAAP measures are reconciled to the
most directly comparable GAAP measures and should be considered supplemental in
nature and should not be considered in isolation or be construed as being more
important than comparable GAAP measures.
Adjusted earnings 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 Company's principal business activity, which is glass container production.
Adjusted earnings are divided by weighted average shares outstanding (diluted)
to derive adjusted earnings per share. Segment operating profit relates to
earnings from continuing operations before interest expense (net), provision for
income taxes and is also exclusive of items management considers not
representative of ongoing operations. Segment operating profit margin is segment
operating profit divided by segment net sales. Management uses adjusted
earnings, adjusted earnings per share, segment operating profit and segment
operating profit margin to evaluate its period-over-period operating performance
because it believes this provides a useful supplemental measure of the results
of operations of its principal business activity by excluding items that are not
reflective of such operations. Adjusted earnings, adjusted earnings per share,
segment operating profit and segment operating profit margin may be useful to
investors in evaluating the underlying operating performance of the Company's
business as these measures eliminate items that are not reflective of its
principal business activity.
Further, adjusted free cash flow relates to cash provided by continuing
operating activities less additions to property, plant and equipment plus
asbestos-related payments. Management uses adjusted free cash flow to evaluate
its period-over-period cash generation performance because it believes this
provides a useful supplemental measure related to its principal business
activity. Adjusted free cash flow may be useful to investors to assist in
understanding the comparability of cash flows generated by the Company's
principal business activity. Since a significant majority of the Company's
asbestos-related claims are expected to be received in the next ten years,
adjusted free cash flow may help investors to evaluate the long-term cash
generation ability of the Company's principal business activity as these
asbestos-related payments decline. It should not be inferred that the entire
adjusted free cash flow amount is available for discretionary expenditures,
since the Company has mandatory debt service requirements and other non-
discretionary expenditures that are not deducted from the measure. Management
uses non-GAAP information principally for internal reporting, forecasting,
budgeting and calculating compensation payments.
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 realize expected growth opportunities,
cost savings and synergies from the Vitro Acquisition, (2) foreign currency
fluctuations relative to the U.S. dollar, (3) changes in capital availability or
cost, including interest rate fluctuations and the ability of the Company to
refinance debt at favorable terms, (4) 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,
(5) the Company's ability to generate sufficient future cash flows to ensure the
Company's goodwill is not impaired, (6) consumer preferences for alternative
forms of packaging, (7) cost and availability of raw materials, labor, energy
and transportation, (8) the Company's ability to manage its cost structure,
including its success in implementing restructuring plans and achieving cost
savings, (9) consolidation among competitors and customers, (10) the Company's
ability to acquire businesses and expand plants, integrate operations of
acquired businesses and achieve expected synergies, (11) unanticipated
expenditures with respect to environmental, safety and health laws, (12) the
Company's ability to further develop its sales, marketing and product
development capabilities, (13) the Company's ability to prevent and detect
cybersecurity threats against its information technology systems, (14) the
Company's ability to accurately estimate its total asbestos-related liability or
to control the timing and occurrence of events relates to asbestos-related
claims, (15) changes in U.S. trade policies, (16) the Company's ability to
achieve its strategic plan, and the other risk factors associated with the
business described in the Company's annual report on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K filed with the SEC. 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.
--------------------------------------------------------------------------------
[1] Adjusted earnings per share and segment operating profit of reportable
segments ("segment operating profit") are non-GAAP financial measures. See
tables included in this release for reconciliations to the most directly
comparable GAAP measures.
[2] See table entitled Reconciliation to Adjusted Earnings and Constant
Currency.
[3] See table entitled Reconciliation to Expected Adjusted Earnings - FY17
Forecast.
[4] Adjusted free cash flow is a non-GAAP financial measure defined as cash
provided by continuing operating activities less additions to property, plant
and equipment plus asbestos-related payments (all components as determined in
accordance with GAAP). See table entitled Reconciliation to Adjusted Free Cash
Flow.
1Q 2017 Earnings Presentation:
http://hugin.info/150659/R/2098277/794642.pdf
1Q 2017 Earnings Release:
http://hugin.info/150659/R/2098277/794641.pdf
O-I Logo:
http://hugin.info/150659/R/2098277/794643.jpg
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: 24.04.2017 - 22:30 Uhr
Sprache: Deutsch
News-ID 537962
Anzahl Zeichen: 19916
contact information:
Town:
Perrysburg, OH
Kategorie:
Business News
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