O-I Glass (OI) Q3 2024 earnings summary

Executive summary

• Q3 2024 results showed a net loss of $80 million ($0.52 per share) and a 4% sales decline to $1.679 billion, driven by lower net prices, production curtailments, and unfavorable foreign currency, despite a 2% increase in sales volume and initial benefits from the Fit to Win program.

• The Fit to Win restructuring program was rapidly implemented, targeting $175 million in savings for 2025 and $300 million+ by 2027, including production curtailments, permanent furnace closures, and SG&A cost reductions.

• The first MAGMA greenfield plant began operations in Bowling Green, Kentucky, supporting future growth.

• 2024 business outlook was revised downward due to soft market conditions, higher tax/cash items, and ongoing production curtailments.

• Management is aggressively implementing cost reduction and network optimization initiatives to drive improved performance in 2025 and beyond.

Financial highlights

• Q3 2024 net loss was $80 million ($(0.52) per share), with adjusted loss per share at $(0.04), compared to net earnings of $51 million ($0.32 per share) and adjusted earnings of $0.80 per share in Q3 2023.

• Net sales for Q3 2024 were $1,679 million (down 4% year-over-year); segment operating profit fell to $144 million from $301 million, and gross profit declined to $215 million from $364 million.

• Americas segment operating profit was $88 million (down from $116 million), and Europe was $56 million (down from $185 million).

• Free cash flow guidance for FY24 revised to a use of $130–$170 million, mainly due to higher working capital, restructuring costs, and lower earnings.

• Net debt at September 30, 2024, was $4,709 million (long-term portion); net interest expense increased to $87 million.

Outlook and guidance

• Full-year 2024 adjusted EPS guidance lowered to $0.70–$0.80 from prior $1.00–$1.25, reflecting lower volume, higher tax rate, and additional production curtailments.

• FY24 sales volume expected to decline low- to mid-single digits, with Q4 volumes expected to be flat year-over-year.

• 2025 is expected to see significant improvement, with at least $175 million in Fit to Win savings and better free cash flow.

• By 2027, targets include sustainable adjusted EBITDA of at least $1.45 billion, free cash flow of at least 5% of sales, and economic spread at least 2% above cost of capital.

• Adjusted effective tax rate for 2024 raised to 42–45% from prior 33–35%.