O-I Glass Reports Full Year and Fourth Quarter 2020 Results

O-I Glass, Inc. (“O-I”) (NYSE: OI) today reported financial results for the full year and fourth quarter ended December 31, 2020.

“The global pandemic significantly impacted O-I’s results in 2020. Yet, business conditions improved later in the year as market conditions stabilized. We are pleased with our fourth quarter results as earnings and cash flows exceeded the company’s most recent outlook. Glass shipments were consistent with prior year levels and operating and cost performance continued to surpass expectations,” said Andres Lopez, CEO.

“The company continued to take bold structural actions to improve O-I’s business fundamentals during 2020, despite the challenges of the pandemic. The benefit from the company’s turnaround initiatives to expand margins significantly exceeded O-I’s original target as efforts were accelerated to help mitigate the impact of the global recession. As we seek to revolutionize glass, we continued to advance MAGMA, and the early 2021 installation in Germany represents a key milestone that will pave the way for broader deployment in 2022 and beyond. Likewise, we are optimizing the company’s business portfolio and capital structure through divestitures of assets that are not core to our strategy. Finally, the corporate modernization effort, which rebranded the company as O-I Glass, supported January 2020’s actions to establish a final, certain and equitable resolution of our legacy asbestos-related claims liabilities.”

“We are optimistic as we enter 2021. While demand may be choppy during the pandemic, business trends should continue to improve as markets stabilize and gradually reopen. Additionally, our strategic actions are set to create future shareholder value, and we expect improved earnings and cash flows in 2021,” concluded Lopez.

Full Year 2020 Results
*Reported Results: For the full year 2020, the company recorded earnings from continuing operations of $1.57 per share (diluted), compared with a loss of $2.56 per share in 2019. Current year earnings from continuing operations before income taxes were $353 million, compared to a loss of $261 million in the prior year. Both periods included items management considers not representative of ongoing operations. Cash provided by continuing operating activities was $457 million in 2020, compared with $408 million in 2019.
*Adjusted Earnings1: Excluding certain items management considers not representative of ongoing operations, 2020 adjusted earnings1 were $1.22 per share, compared with the prior year of $2.24 per share. Lower earnings primarily reflected lower sales and production levels due to the global pandemic.
*Segment Operating Profit1: Full year 2020 segment operating profit was $678 million compared to $856 million in 2019. Higher selling prices more than compensated for cost inflation, but were more than offset by the impact of 4 percent lower sales volume and approximately 7.5 percent lower production volume due to the pandemic. Turnaround initiatives, strong operating performance and cost control measures partially offset the impact of lower production levels.
*Cash Flows: Cash provided by continuing operating activities was $457 million in 2020, compared with $408 million in 2019. 2020 free cash flow1 was $146 million which exceeded the company’s guidance of more than $100 million free cash flow in 2020.
*Capital Structure: Total debt was $5.1 billion at December 31, 2020 compared to $5.6 billion at prior year end. Net debt1 was $4.6 billion at December 31, 2020 which was down $429 million from the prior year. Lower debt primarily reflected favorable cash flow and use of proceeds from divestitures partially offset by unfavorable foreign currency translation. As a result of favorable cash flows and refinancing activities, committed liquidity exceeded $2.2 billion at year end 2020.

Fourth Quarter 2020 Results
*Reported Earnings: For the fourth quarter 2020, the loss from continuing operations was $0.18 per share compared to earnings of $0.20 per share (diluted) in the fourth quarter of 2019. Current year earnings from continuing operations before income taxes were $14 million, compared to $65 million in the prior year. Both periods included items management considers not representative of ongoing operations.
*Adjusted Earnings: Excluding certain items management considers not representative of ongoing operations, adjusted earnings1 were $0.40 per share in the fourth quarter of 2020, compared with $0.50 per share in the fourth quarter of 2019. While operating performance was consistent with the prior year, lower adjusted earnings primarily reflected recent divestitures. Adjusted earnings exceeded the company’s guidance of $0.30 to $0.35 per share.
*Segment Operating Profit: Segment operating profit1 was $200 million compared to $203 million in the prior year. Higher selling prices more than offset cost inflation. Adjusted for the sale of the Australia and New Zealand (“ANZ”) business unit earlier in the year, glass container shipments were flat with the prior year quarter reflecting market stability amid the ongoing pandemic. Strong operating performance, benefits from the company’s turnaround initiatives to expand margins and cost control measures substantially offset the earnings dilution from recent divestitures.

Net sales were $1.5 billion in the fourth quarter of 2020 compared to $1.6 billion in the prior year quarter. The ANZ divestiture reduced net sales by $153 million. After adjusting for the sale of ANZ, average selling prices improved 2 percent and increased revenue $33 million while shipments in tons were flat with the prior year. Unfavorable foreign currency translation decreased net sales by $11 million.

Segment operating profit was $200 million in the fourth quarter of 2020 compared to $203 million in the prior year. Operating profits in both the Americas and Europe improved on a year-over-year basis.
details at: http://investors.o-i.com/news-releases/news-release-details/o-i-glass-reports-full-year-and-fourth-quarter-2020-results