O-I REPORTS FIRST QUARTER 2019 RESULTS

Owens-Illinois, Inc. (NYSE: OI) today reported financial results for the first quarter ended March 31, 2019.

 "Our first quarter results were in-line with our guidance as the Company commissioned new capacity to support future growth," said Andres Lopez, CEO.  "In addition, we announced future expansion at our Gironcourt, France plant as well as a definitive agreement to acquire the Nueva Fanal[1] operations in Mexico from ABI.  All of these actions support key strategic customers, align O-I to attractive premium segments and will drive future profitable growth."

 "Segment profit and margins improved in both Europe and Asia Pacific compared to the prior year.  Profits declined in the Americas reflecting foreign currency headwinds and incremental costs to commission new capacity which was concentrated in this region during the first quarter," added Lopez.  "Our teams are aligned and energized like never before, executing growth with rigor and discipline.  This, combined with our balanced capital allocation strategy, is expected to create significant value for our shareholders for years to come."

Highlights

$188 million, subject to customary closing conditions, including competition authority approval, and is expected to close in the second half of 2019.  In addition, the Company announced the future expansion at its Gironcourt, France plant. These strategic initiatives are supported by long-term customer supply agreements.

First Quarter 2019 Results

First quarter 2019 net sales were $1.6 billion, compared to $1.7 billion in the prior year, driven primarily by the stronger U.S. dollar.  Average selling prices improved 2 percent on a global basis, mainly due to price adjustment formulas, while sales volumes declined 2.5 percent globally.

After adjusting for the planned shift in production from the U.S. to the strategic JV with CBI[5] (which would equate to approximately 1.5 percent of global sales volume), globally, sales volumes declined approximately 1 percent.  In the Americas, organic sales increased after excluding the volume shift to the strategic JV.  Brazil, Mexico and the Andean region reported broad-based gains in shipments, compared to the prior year, and U.S. beer sales volume stabilized.  The Company continues to be well positioned to benefit from the growing popularity of Mexican beer across the world, as evidenced by strong volume growth in the joint venture with CBI and domestic sales in Mexico, as well as the recently-announced acquisition of Nueva Fanal.  Europe and Asia pacific shipments declined compared to the prior year first quarter, as customers rebalanced their supply chain.

Segment operating profit was $200 million in the first quarter 2019, compared with $224 million in the prior year.  The decline is largely driven by the stronger U.S. dollar, the aforementioned decline in sales volumes, and incremental costs to commission new capacity to support growth.  Results included a net $3 million benefit from the recognition of an energy credit in Europe this quarter and the lack of miscellaneous gains recognized in the prior year.

As expected and in-line with the Company's position to accelerate claims disposition, asbestos related payments totaled $71 million in the first quarter of 2019.

Consistent with the Company's approach to balanced capital allocation, O-I repurchased 2.1 million shares for approximately $38 million in the first quarter 2019.  Overall, the Company's share repurchase program has retired 8.7 million shares over the past 12 months.

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03.05.2019, Owens-Illinois

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