02.07.20
O-I Glass, Inc. reported financial results for the full year and fourth quarter ended Dec. 31, 2019.
“O-I’s 2019 earnings were in line with our most recent guidance and cash flows exceeded expectations. We made significant progress during the second half of the year, ending on a positive note despite a very challenging start to 2019,” said Andres Lopez, CEO.
“As we enter 2020, we are taking bold structural actions to improve O-I’s business fundamentals,” added Lopez. “We are optimizing the company’s business portfolio and capital structure through accretive acquisitions and divestitures of assets that are not core to our strategy. Likewise, our recent corporate modernization effort, which rebranded the company as O-I Glass, supported January’s actions to establish a final, certain and equitable resolution of our legacy asbestos-related claims liabilities.
“We are focused on improving our operating performance with key turnaround initiatives including revenue optimization, factory performance and cost transformation. Furthermore, we intend to revolutionize glass, supported by our new MAGMA technology and leveraging glass’s clear advantages as a highly sustainable packaging choice. The combination of these efforts will drive improved operating performance and cash flow generation in 2020 and beyond,” said Lopez.
For the full year 2019, the company recorded a loss from continuing operations of $2.56 per share, compared with earnings of $0.89 per share (diluted) in 2018. Both periods included items management considers not representative of ongoing operations.
Cash provided by continuing operating activities for 2019 was $408 million, compared with $793 million for 2018. Adjusted free cash flow for 2019 was $133 million, which solidly exceeded the company’s expectation of approximately $100 million, compared with $362 million for 2018.
O-I expects full year 2020 adjusted earnings will be approximately $2.10 – $2.25 per share. Cash provided by continuing operating activities is expected to exceed $650 million and free cash flow should approximate or exceed $300 million.
Full year net sales were $6.7 billion compared to $6.9 billion in 2018. Higher selling prices increased revenue $176 million, reflecting a 2.6% increase in average selling prices on a global basis. However lower shipments negatively impacted sales by $96 million as sales volume in tons declined 0.6%.
Segment operating profit was $841 million in 2019, compared with $945 million in the prior year.
Total debt was $5.6 billion at the end of 2019 compared to $5.3 billion in 2018. Net debt was $5.0 billion compared to $4.8 billion in the prior year and was favorable to the company’s most recent guidance of approximately $5.1 billion.
Net sales in the fourth quarter of 2019 were $1.6 billion, flat to the prior year period. Higher selling prices increased revenue $42 million, reflecting a 2.6% increase in average selling prices on a global basis. Segment operating profit was $200 million in the fourth quarter, compared to $211 million in the prior year fourth quarter.
“O-I’s 2019 earnings were in line with our most recent guidance and cash flows exceeded expectations. We made significant progress during the second half of the year, ending on a positive note despite a very challenging start to 2019,” said Andres Lopez, CEO.
“As we enter 2020, we are taking bold structural actions to improve O-I’s business fundamentals,” added Lopez. “We are optimizing the company’s business portfolio and capital structure through accretive acquisitions and divestitures of assets that are not core to our strategy. Likewise, our recent corporate modernization effort, which rebranded the company as O-I Glass, supported January’s actions to establish a final, certain and equitable resolution of our legacy asbestos-related claims liabilities.
“We are focused on improving our operating performance with key turnaround initiatives including revenue optimization, factory performance and cost transformation. Furthermore, we intend to revolutionize glass, supported by our new MAGMA technology and leveraging glass’s clear advantages as a highly sustainable packaging choice. The combination of these efforts will drive improved operating performance and cash flow generation in 2020 and beyond,” said Lopez.
For the full year 2019, the company recorded a loss from continuing operations of $2.56 per share, compared with earnings of $0.89 per share (diluted) in 2018. Both periods included items management considers not representative of ongoing operations.
Cash provided by continuing operating activities for 2019 was $408 million, compared with $793 million for 2018. Adjusted free cash flow for 2019 was $133 million, which solidly exceeded the company’s expectation of approximately $100 million, compared with $362 million for 2018.
O-I expects full year 2020 adjusted earnings will be approximately $2.10 – $2.25 per share. Cash provided by continuing operating activities is expected to exceed $650 million and free cash flow should approximate or exceed $300 million.
Full year net sales were $6.7 billion compared to $6.9 billion in 2018. Higher selling prices increased revenue $176 million, reflecting a 2.6% increase in average selling prices on a global basis. However lower shipments negatively impacted sales by $96 million as sales volume in tons declined 0.6%.
Segment operating profit was $841 million in 2019, compared with $945 million in the prior year.
Total debt was $5.6 billion at the end of 2019 compared to $5.3 billion in 2018. Net debt was $5.0 billion compared to $4.8 billion in the prior year and was favorable to the company’s most recent guidance of approximately $5.1 billion.
Net sales in the fourth quarter of 2019 were $1.6 billion, flat to the prior year period. Higher selling prices increased revenue $42 million, reflecting a 2.6% increase in average selling prices on a global basis. Segment operating profit was $200 million in the fourth quarter, compared to $211 million in the prior year fourth quarter.