O-I GLASS REPORTS STRONG SECOND QUARTER 2021 RESULTS

O-I Glass, Inc. (“O-I”) (NYSE: OI) today reported financial results for the second quarter ended June 30, 2021.

“O-I’s second quarter business performance was strong and exceeded our expectations. Demand was robust and shipment levels rebounded to pre-pandemic levels. Excluding the effect of recent divestitures, sales volume was up 18 percent from the prior year period. Likewise, the company’s performance benefited from higher production as well as continued solid operating and cost performance supported by the company’s Margin Expansion initiatives. Second quarter cash provided by operating activities was also strong reflecting solid earnings,” said Andres Lopez, CEO.

“We continued to make very good progress on our 2021 priorities through the first half of the year. Our Margin Expansion initiatives generated $40 million of benefits year-to-date and we expect full-year benefits will exceed our original target for 2021. Consistent with our goal to revolutionize glass, we successfully validated multiple R&D assumptions at our first full-scale Generation 1 MAGMA line at Holzminden Germany. We also remain on track to pilot our Generation 2 MAGMA line at Streator Illinois in the second half of the year. Likewise, our Glass Advocacy campaign has reached over 80 million people in the U.S. as we seek to rebalance the packaging narrative and share the many favorable and sustainable attributes of glass. As we optimize our structure, we are now over 80 percent complete on our $1.15 billion divestiture program which should wrap up by the end of 2022. Finally, the Paddock Chapter 11 plan of reorganization is progressing as expected consistent with the agreement-in-principle reached in April as we seek a fair and final resolution to Paddock’s legacy asbestos liabilities. All of these actions are consistent with our strategy to increase shareholder value and ensure sustainable prosperity for O-I.”

“Despite a continued volatile environment and challenges with severe weather earlier in the year, our full year 2021 adjusted earnings, cash provided from operating activities and free cash flow outlook has improved reflecting favorable market trends and the company’s continued strong operating performance,” concluded Lopez.  

Second Quarter 2021 Results

Net sales approximated $1.7 billion in the second quarter of 2021 which represented a $242 million increase from the prior year period. Higher average selling prices contributed $27 million to net sales. Adjusted for divestitures, shipments in tons increased 18 percent as higher sales volumes and favorable mix boosted revenues $255 million. Net sales benefited $79 million from favorable foreign currency translation. Recent divestitures reduced net sales by $111 million and revenue from technical services declined $8 million reflecting lower engineering project activity.

Segment operating profit was $232 million in the second quarter of 2021 compared to $99 million in the prior year period.


Retained corporate and other costs were $42 million compared to $37 million in the prior year quarter. Higher costs primarily reflected additional R&D investment in MAGMA, marketing expense for the company’s glass advocacy campaign and management incentives.

In both the second quarter of 2021 and 2020, the company recorded several significant items impacting reported results as presented in the table entitled Reconciliation to Adjusted Earnings. Management considers these items not representative of ongoing operations and they are excluded from adjusted earnings. In the second quarter of 2021, these items included a $69 million gain recorded on an indirect tax credit in Brazil and $9 million for restructuring and other charges. In the second quarter of 2020, these items included approximately $71 million for restructuring, asset impairment and other costs, $38 million of debt refinancing expense and $8 million in pension settlement charges.     

2021 Outlook

Currently, O-I expects third quarter 2021 adjusted earnings will approximate $0.47 to $0.52 per share. This outlook assumes 0 to 1 percent same structure sales volume growth (in tons). The benefit of higher selling prices should partially offset elevated cost inflation. The company expects 8 to 10 percent higher production levels compared to the prior year period which was impacted by forced curtailments in certain markets. The benefit of higher production is expected to more than offset higher maintenance and asset project activity expense which have normalized now that disruption due to the pandemic has subsided. Furthermore, improved results will reflect cost savings from the company’s Margin Expansion initiatives.

The company is updating its full year 2021 guidance. O-I now expects sales volume in tons should increase 4 to 5 percent compared to 2020. Adjusted earnings per share should approximate $1.65 to $1.75. Likewise, the company anticipates cash provided by operating activities of around $660 million and approximately $260 million in free cash flow.

Given significant market uncertainty due to the global pandemic, the company’s business outlook is subject to adjustment, especially if there is a material change in demand trends compared to expectations. This outlook assumes foreign currency rates as of July 31, 2021 and an effective annual tax rate of approximately 30 to 32 percent.

05.08.2021, O-I GLASS

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