O-I Glass, Inc. /DE/ (OI)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 net sales were $1,529M, reported EPS was -$1.00, and adjusted EPS was -$0.05; segment operating profit was $136M, reflecting continued pricing pressure and temporary curtailments, with Americas improving modestly while Europe weakened .
• FY 2024 adjusted EPS of $0.81 modestly exceeded management’s latest guidance range ($0.70–$0.80) amid an 8% decline in net sales and lower segment operating profit; free cash flow was a use of $128M versus guidance for a use of $130–$170M .
• 2025 guidance calls for adjusted EPS of $1.20–$1.50, free cash flow of $150–$200M, capex of $400–$450M, and an adjusted effective tax rate of ~33–36%; management expects $175–$200M in Fit To Win savings and sees currency translation as a headwind .
• Potential stock-reaction catalysts: execution on Fit To Win savings and network optimization, clarity on tariff impacts (management modeled a ~$10–$15M headwind that they expect to offset), and Investor Day (Mar 14) with more detail on Phase B and MAGMA milestones .

What Went Well and What Went Wrong

What Went Well

• Americas segment operating profit rose YoY to $96M in Q4 (from $93M), aided by 5% volume growth and $19M lower operating costs, partly offsetting unfavorable net price .
• Demand stabilization: consolidated shipments were flat YoY in Q4; Americas volumes rose 5% with strength in Mexico and Brazil, while January volumes started low-single-digit up in both regions .
• Fit To Win execution: $25M savings achieved in Q4; 2025 savings target raised to $175–$200M; SG&A targeted to 7–7.5% of sales in 2025 and ≤5% by 2026, with ~7% capacity closures by mid-2025 .

What Went Wrong

• Europe softness: Q4 Europe segment operating profit fell to $40M (from $75M), pressured by unfavorable net price (-$29M) and -5% volume, with additional FX headwinds .
• Net price headwind and overcapacity in parts of Europe drove margin compression and reduced segment margins vs prior year (Q4 reportable segment margin decreased to 9.1% vs 10.4% in Q4 2023) .
• Elevated downtime: O-I curtailed ~17% capacity in Q4 to rebalance inventories; under-absorbed fixed overhead totaled ~$250M over 2023–2024, expected to halve to ~$125M in 2025, suppressing near-term earnings power .

Financial Results

Segment operating profit trend:

Q4 segment net sales YoY:

Q4 segment margins:

Quarterly operational KPIs:

FY liquidity and cash metrics:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We are rapidly implementing our Fit to Win way of working… designed to improve our overall competitiveness by reducing our total cost of doing business… significantly improve future earnings and cash flow.”
• “We expect Phase A will generate savings in excess of $300 million over the next 3 years… savings target to between $175 and $200 million in 2025.”
• “Adjusted EBITDA of $1.15 billion to $1.2 billion [in 2025]… Sales volume is expected to be flat or down slightly… currency translation would be a clear headwind.”
• “When glass gets within about 15% of the cost of cans, then you see a measurable flow from cans back into glass.”
• “MAGMA… we continue to ramp up production at our first greenfield line in Bowling Green… we have paused the development of Generation 3.”

Q&A Highlights

• Pricing and contract coverage: ~55% of global portfolio under long-term contracts; ~80–90% of 2025 pricing already landed; Europe small-customer renegotiations mostly complete .
• Tariff modeling: Management estimates ~$10–$15M exposure; believes self-help levers and domestic mix shifts will offset; China-related import tariffs could benefit O-I vs imported glass .
• Under-absorbed fixed overhead: ~$250M cumulative impact over 2023–2024; expected to be ~halved to ~$125M in 2025 as closures and normalization progress .
• Working capital: Targeting additional $50–$100M inventory reduction in 2025; AP likely lower with smaller plant footprint; overall bridge assumes conservative working capital .
• Energy and cost program: Enterprise energy management and plant-level software to reduce usage and offset future headwinds; energy included in Fit To Win scope .

Estimates Context

• S&P Global consensus estimates for Q4 2024 could not be retrieved due to data access limits at the time of analysis; therefore, a quantitative comparison versus Wall Street consensus is unavailable. We will update when access is restored. Values would be retrieved from S&P Global.*

Key Takeaways for Investors

• Execution on Fit To Win is the core 2025/2026 earnings driver; $175–$200M savings targeted in 2025 with SG&A ratio moving toward 7–7.5% and ~7% capacity closures by mid-2025 .
• Americas are showing momentum (Q4 Americas SOP +3% YoY with +5% volume), while Europe remains pressured by price/volume; portfolio mix and network optimization are critical to margin recovery .
• 2025 setup: adjusted EPS $1.20–$1.50 and FCF $150–$200M with capex down to $400–$450M; FX is a headwind, volumes guided flat to slightly down, and restructuring cash (~$120–$150M) embedded .
• Tariffs present uncertainty but modeled impact (~$10–$15M) appears manageable; potential mix shifts toward domestic brands could be a tailwind for O-I’s U.S. network .
• MAGMA Bowling Green ramp is a near-term execution milestone; Gen 3 paused pending industrial-scale performance and returns of ≥WACC+2% .
• Near-term margin lift should come from halving under-absorbed overhead and lower operating costs; exit-2025 carry of excess capacity ~ $75M implies further margin normalization potential into 2026 .
• Watch Investor Day (Mar 14) for Phase B detail on total supply chain optimization and incremental savings pathway to 2027 targets (≥$1.45B sustainable EBITDA, ≥5% FCF of revenue) .

Note: All figures are as reported by the company; adjusted measures are non-GAAP and reconciled in filings/releases.