• Full Year Adjusted Earnings: $0.81 per share, slightly exceeding guidance but down from 2023.
• Fourth Quarter Adjusted Loss: $0.05 per share, compared to $0.12 earnings in the same period last year.
• Net Sales: Declined due to a 2% decrease in selling prices and 4% lower sales volume.
• Free Cash Flow: $128 million use of cash, slightly favorable to guidance due to good working capital management.
• Leverage Ratio: Increased to 3.9 times due to lower adjusted EBITDA.
• Segment Operating Profit - Americas: $96 million, up from $93 million in Q4 2023.
• Segment Operating Profit - Europe: $40 million, down from $75 million in Q4 2023.
• 2025 Adjusted EPS Guidance: Expected to be $120 million to $150 million, a 50% to 85% increase from 2024.
• 2025 Free Cash Flow Guidance: Expected between $150 million and $200 million.
• 2025 Adjusted EBITDA Guidance: $1.15 billion to $1.2 billion, up from $1.1 billion in 2024.
• Inventory Reduction: Reduced by $108 million in 2024, with further reductions expected in 2025.
• Cost Savings Target for 2025: Increased to between $175 million and $200 million.

• Warning! GuruFocus has detected 3 Warning Signs with OI.

Release Date: February 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• O-I Glass Inc (NYSE:OI) exceeded its most recent guidance with full-year adjusted earnings of $0.81 per share.
• The company expects a significant improvement in 2025, with adjusted EPS projected to increase by 50% to 85%.
• O-I Glass Inc (NYSE:OI) is implementing its 'Fit to Win' program, which is expected to generate over $300 million in savings over the next three years.
• The company has seen stabilization in demand and better-than-anticipated operating performance in the fourth quarter of 2024.
• O-I Glass Inc (NYSE:OI) anticipates free cash flow to rebound to between $150 million and $200 million in 2025, a substantial improvement from the previous year.

Negative Points

• 2024 was a challenging year for O-I Glass Inc (NYSE:OI) due to sluggish market demand and macroeconomic conditions.
• The company reported an adjusted loss of $0.05 per share in the fourth quarter, down from adjusted earnings of $0.12 per share in the same period last year.
• Net sales declined due to a 2% decrease in selling prices and a 4% drop in sales volume.
• Higher interest expenses and tax rates negatively impacted full-year EPS.
• The leverage ratio increased to 3.9 times due to lower adjusted EBITDA.

Q & A Highlights

Q: Can you expand on the signs of volume stability and the impact of alcohol on your portfolio? A: Gordon Hardie, CEO: Alcohol constitutes about 75% of our portfolio. We see volume growth in the Americas, particularly in Brazil, Mexico, and Colombia, with early signs of growth in North America. However, Europe is experiencing a 5% decline in sales due to soft consumer demand and reduced exports to China.

Q: What is your confidence level regarding pricing in 2025, especially in Europe? A: Gordon Hardie, CEO: In the Americas, we see growth and tighter capacity utilization, leading to less pricing pressure. In Europe, particularly Southwest Europe, there is some price pressure due to overcapacity. John Haudrich, CFO: About 55% of our global portfolio is under long-term contracts with price adjustment formulas, providing stability. We are 80% to 90% through our pricing negotiations for 2025.

Q: How would a 25% tariff impact your volume in 2025, and how volume-dependent are your Fit to Win performance improvements? A: Gordon Hardie, CEO: Our Fit to Win program is not volume-dependent. We assume flat volume through 2027. Tariffs could impact about 2% of our empty bottle volume, but we expect to cover this through accelerated initiatives. John Haudrich, CFO: We have an advantage with the tariff on Chinese imports, which could benefit us.

Q: Are there regions or categories where substrate substitution is a headwind or tailwind in 2025? A: Gordon Hardie, CEO: We aim to be competitive with cans. When glass costs are within 15% of cans, we see a shift back to glass. We are focusing on getting competitive with cans to offer customers more glass options. The recent approval for glass in RTDs opens new growth opportunities.

Q: What are your plans for energy contracts as they come due in 2026, and how does this fit into your Fit to Win plan? A: John Haudrich, CFO: We have identified over $300 million in benefits from Fit to Win, with $175 million to $200 million expected in 2025. Energy is part of our end-to-end business review, and we are implementing enterprise-wide programs to reduce energy usage and offset potential headwinds.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.