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OG

O-I Glass, Inc. /DE/ (OI)·Q1 2025 Earnings Summary

Executive Summary

  • Adjusted EPS of $0.40 beat Wall Street consensus $0.24 and revenue of $1.567B was slightly above consensus $1.561B; EBITDA modestly missed ($269M vs $274M). Guidance for FY25 adjusted EPS $1.20–$1.50 and FCF $150–$200M was reaffirmed . EPS*, Revenue*, EBITDA*, Estimates count*.
  • Americas strength (SOP $141M, +38% YoY) offset Europe weakness (SOP $68M, -49% YoY) amid temporary curtailments and price pressure; EBT fell to $18M on $80M restructuring .
  • Fit to Win delivered $61M savings in Q1, ahead of plan; management raised savings target to at least $250M in 2025 and $650M cumulatively by 2027 .
  • Macro/trade uncertainty emerged as near-term headwind (April volumes down 1–2% in Europe categories exposed to exports); management remains cautious but sees potential substrate tailwinds from aluminum tariffs and domestic glass advantage .

What Went Well and What Went Wrong

What Went Well

  • Americas SOP rose to $141M (vs $102M), supported by >4% volume growth, stable net price, $27M Fit to Win benefits, and a $7M insurance settlement; capacity remained tight and no material curtailments .
  • Fit to Win savings of $61M exceeded plan; management is “confident” in achieving $250M in 2025 and $650M by 2027. “Momentum is building…we remain confident in achieving our savings targets” — CEO Gordon Hardie .
  • Guidance reaffirmed: FY25 adjusted EPS $1.20–$1.50 (+50–85% YoY) and FCF $150–$200M, supported by cost actions and lower capex ($400–$450M) .

What Went Wrong

  • Europe SOP fell to $68M (vs $133M) on lower net price, elevated competitive pressures, and unabsorbed fixed costs from curtailments to reduce inventory; segment margin declined despite ~4% volume growth .
  • Reported diluted EPS was a loss of ($0.10) vs $0.45 last year, driven by $80M restructuring/impairment charges; EBT margin compressed to 1.1% (vs 7.3% YoY) .
  • April shipments softened 1–2% (adjusted for Easter), notably in European wine/spirits categories exposed to exports, prompting caution on near-term sales volume outlook (stable full-year) .

Financial Results

MetricQ1 2024Q4 2024Q1 2025 ActualQ1 2025 Consensus
Net Sales ($USD Billions)$1.593 $1.50 $1.567 $1.561*
Diluted EPS (GAAP) ($)$0.45 ($1.00) ($0.10) —
Adjusted EPS (non-GAAP) ($)$0.45 ($0.05) $0.40 $0.236*
Earnings Before Income Taxes ($USD Millions)$117 ($125) $18 —
EBT / Net Sales (%)7.3% -8.3% (calc: -125/1500) 1.1% —
Segment Operating Profit ($USD Millions)$235 $136 $209 —
Segment OP Margin (%)15.0% 9.1% (calc: 136/1500) 13.6% —
EBITDA ($USD Millions)——$269*$274*

Notes: Values with asterisks (*) retrieved from S&P Global. Calculated cells include citations to inputs.

Segment Breakdown

Segment MetricQ1 2024Q4 2024Q1 2025
Americas Net Sales ($USD Millions)$854 —$873
Europe Net Sales ($USD Millions)$709 —$667
Americas SOP ($USD Millions)$102 $96 $141
Europe SOP ($USD Millions)$133 $40 $68
Americas SOP Margin (%)11.9% —16.2%
Europe SOP Margin (%)18.8% —10.2%

KPIs

KPIQ1 2024Q4 2024Q1 2025
Shipments YoY (Consolidated)—~flat +4.4%
Americas Shipments YoY (select categories)—+5% Beer ~+4%, Spirits +double-digit, Food +high single-digit
Europe Shipments YoY (select categories)—-5% Beer strong; NAB +high single-digit; Food +mid-single-digit; Wine +low-single-digit; Spirits -mid-single-digit
Fit to Win Savings ($USD Millions)—$25 in Q4 $61 in Q1
Retained Corporate & Other Costs ($USD Millions)$40 $30 $30
Net Interest Expense ($USD Millions)$78 —$81
Inventory Reduction vs prior year ($USD Millions)—-$108 FY -$225 YoY (run-rate)
Factored Receivables ($USD Millions)$525 $535 $504

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSFY 2025$1.20–$1.50 $1.20–$1.50 Maintained
Free Cash FlowFY 2025$150–$200M $150–$200M Maintained
Adjusted Effective Tax RateFY 2025~33–36% ~33–36% Maintained
CapexFY 2025$400–$450M $400–$450M Maintained
Fit to Win BenefitsFY 2025$175–$200M (Phase A initial) At least $250M (raised) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Fit to Win cost programTarget ≥$300M savings by 2027; closing ≥7% capacity by mid-2025 Raised 2025 savings to $175–$200M; SG&A delayering; network optimization underway $61M Q1 savings; target at least $250M in 2025; confident in $650M by 2027 Accelerating
Tariffs/macroL-shaped recovery; forecasting challenges; capacity curtailments to cut inventory Cautious outlook; FY25 guidance excludes tariffs; aluminum and currency noted Limited direct exposure (~4.5%); April softness in EU export categories; potential substrate tailwinds Elevated uncertainty
Regional trendsAmericas +7% volumes; Europe -2%; price down in both Americas +5% volumes; Europe -5% Americas strong, tight capacity; Europe pressured by net price and downtime Divergent hemispheres
Product performanceSpirits headwinds; beer/food/NAB mixed Spirits inventories high; beer soft in Europe; food/NAB stable Americas: beer ~+4%, spirits double-digit, food high single-digit; Europe: beer/NAB up, wine modest, spirits down Improving ex-EU spirits
Technology/efficiency (MAGMA/TOE)Bowling Green MAGMA started; target $1.45B EBITDA by 2027 MAGMA ramp-up; TOE pilot at Toano; Phase B to optimize value chain TOE rollout broader from May; efficiency gains; investor day reinforcement Scaling execution
Sustainability/energy—Energy contracts favorable; capex moderation Biofuel trial success in UK; Linde OPTIMELT TCR to cut fuel ~30% at Holzminden Positive initiatives

Management Commentary

  • “Shipments increased across both the Americas and Europe and we achieved $61 million in Fit To Win benefits which exceeded our projections.” — CEO Gordon Hardie .
  • “We are reaffirming our 2025 guidance and anticipate adjusted earnings will increase between 50 to 85 percent from 2024 levels.” — CEO Gordon Hardie .
  • “Based on a strong start to the year, our full year performance is currently tracking towards the high end of our earnings guidance range… however, we are maintaining our original business outlook given the uncertainty related to new tariff policies.” — CFO John Haudrich .

Q&A Highlights

  • Prebuy effect limited: management estimates only ~$0.01–$0.02 EPS of Q1 strength tied to prebuy, with volume robust across Jan/Feb/March .
  • April softness: volumes down ~1–2% in Europe categories exposed to exports (wine/spirits) while Americas remained up low single-digit; full-year volume outlook “flattish” maintained .
  • Tariffs and aluminum: direct tariff exposure limited (~4.5% of global volume); potential substrate tailwind if aluminum tariffs narrow glass-can cost gap; not embedded in guidance .
  • Curtailments: none of consequence in Americas; Europe downtime front-loaded to drive inventory normalization; headwinds to moderate in H2 .
  • Inventory/absorption: under-absorbed fixed overhead expected to halve in 2025 as closures and normalization progress (from ~$250M impact in 2024 to ~$125M in 2025) .

Estimates Context

  • Adjusted EPS: $0.40 beat consensus $0.236; nine EPS estimates. Revenue: $1.567B slightly beat $1.561B; eight revenue estimates. EBITDA: $269M modest miss vs $274M [GetEstimates Q1 2025]*.
  • Implications: Estimate revisions likely skew positive for EPS on Americas strength and realized cost savings; cautious tone on tariffs and Europe pricing may cap upward revenue/EBITDA revisions until H2 clarity .

Note: Values with asterisks (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Strong execution: meaningful Americas margin expansion and $61M Q1 savings signal Fit to Win momentum; expect continued mix of cost takeout and operational efficiency to drive FY25 EPS within guidance range .
  • Europe remains the swing factor: net price pressure and curtailments weigh near term; management expects H2 improvement as downtime moderates and restructuring benefits flow through .
  • Narrative catalysts: raised 2025 savings target (to ≥$250M) and reaffirmed guidance support sentiment; sustainability and efficiency initiatives (biofuel trial, OPTIMELT TCR) add medium-term cost tailwinds .
  • Tariff uncertainty: limited direct exposure but near-term demand elasticity in export categories bears watching; potential can-to-glass shift if aluminum tariffs persist offers upside optionality .
  • Cash/Capex discipline: guidance embeds FCF rebound to $150–$200M and capex cut to $400–$450M; expect deleveraging trajectory as EBITDA recovers .
  • Trading setup: Q1 beat vs consensus and reaffirmed FY guide a positive; monitor Q2 commentary on Europe pricing, April/May volumes, and TOE rollout pace for trajectory confirmation .
  • Medium-term thesis: If Fit to Win delivers targeted savings and Phase B unlocks productivity/network optimization, margin and FCF profile can re-rate toward 2027 targets (Adj. EBITDA ≥$1.45B) .