Page 20 - Glass Machinery Plants & Accessories no. 4/2018

businessnews

www .g lassonline.com

O-I operating profit. Earnings from continuing operations, and
adjusted earnings, are expected to be in the range of USD
FIRST QUARTER 2.75 to USD 2.85 per share, which compares favorably with
adjusted earnings of USD 2.65 per share in 2017. Cash
2018 RESULTS provided by continuing operating activities is expected to
be approximately USD 800 million, whereas adjusted free
Owens-Illinois, Inc. (O-I) reported financial results for the cash flow for the year 2018 is expected to be approximately
first quarter ended 31 March 2018 on 23 April. USD 400 million. The company consolidated the North
“This quarter marks the company’s ninth consecutive America and Latin America segments into one segment,
quarter of higher earnings year-over-year,” said Andres named the Americas, to better leverage critical resources
Lopez, CEO. “We delivered strong performance in- and competencies across a larger geography, to replicate
line with our guidance, while executing the planned, best practices and to reduce costs. First quarter 2018 net
finite investments in asset stability. This reflects our sales were USD 1.7 billion, up USD 121 million from prior
focus and commitment to delivering on our strategic year, an increase of nearly 8%. Prices were 2% higher on
initiatives, including programmes aimed at improving the a global basis, mainly due to price adjustment formulas
customer experience, shifting to higher-value segments, and a constructive environment in Europe. Favourable
becoming more cost-competitive, leveraging technology foreign currency translation benefited net sales by USD
and simplifying our organization.” “Our European and 99 million, primarily due to a stronger Euro. In line with
Americas regions delivered particularly strong sales and guidance for the quarter, total glass container shipments
margin expansion in the first quarter. We continue to be were comparable with the prior year. In the Americas,
positive about our 2018 outlook,” said Lopez. “Our teams shipments increased nearly 2% compared to the prior
are aligned and energized like never before, executing with year period, driven primarily by higher shipments to food
rigor and discipline. This, combined with our balanced and alcoholic beverage customers. Consistent with the
capital allocation strategy, is expected to create significant past several quarters, year-over-year shipments in Brazil
value for our shareholders for years to come.” For the recovered strongly. However, in the US, solid growth in
first quarter 2018, the company recorded earnings from food and non-alcoholic beverages were more than offset
continuing operations of USD 0.59 per share (diluted). by a decline in alcoholic beverages, which is largely due
This was on the upper end of management guidance of to ongoing trends in megabeer. The Company is well
USD 0.55 to USD 0.60 per share. positioned to benefit, however, from US beer imports, as
Net sales were USD 1.7 billion, an increase of nearly evidenced by strong volume growth in the joint venture
8% compared to the prior year, due to higher prices and with CBI, which has successfully ramped up its fourth
favourable currency translation. Total glass container furnace. In Europe, sales volumes continue to be robust.
shipments in the first quarter of 2018 were comparable to Shipments in first quarter 2018 were essentially on par with
the prior year quarter, with low-single-digit gains reported the strong comparable in the prior year and are 4% higher
in the Americas. Earnings from continuing operations than 2016. Asia Pacific shipments declined, partially driven
before income taxes were USD 135 million, compared by the timing of returnable float replenishment in Southeast
with USD 73 million in the prior year, driven by solid Asia. Segment operating profit was USD 224 million in the
operational performance and non-recurrence of certain first quarter 2018, compared with USD 218 million in the
expenses in the prior year. Segment operating profit of prior year, an improvement of 3%, and the ratio of earnings
reportable segments for the first quarter 2018 was USD from continuing operations before income taxes to net
224 million, an increase of 3% compared with prior year. sales increased substantially. The Americas posted segment
Solid gains were reported in the Americas and Europe. As operating profit of USD 147 million, up 6% compared with
expected, Asia Pacific reported lower segment operating prior year, and segment operating profit margins expanded
profit, mainly reflecting temporary higher costs associated 20 basis points. The aforementioned increase in sales
with asset improvements. Strategic initiatives in commercial volume contributed to the gain. Selling prices were modestly
programmes and end-to-end supply chain management higher than cost inflation, largely driven by a catch up in
generated benefits as planned. Total systems cost prior year inflationary pressures. The region continues to
improvements were broad based across key cost categories. benefit from Total Systems Cost efforts. In Europe, segment
The company repurchased 2 million shares in the quarter. operating profit was USD 72 million, up more than 20%,
The impact on earnings per share in the quarter was ‘de and segment operating profit margins improved a healthy
minimis’ because most of the shares were repurchased 60 basis points. Favourable price-cost spread, cost savings
near quarter end. The company is on track to repurchase from the closure of a plant in the Netherlands in 2017,
approximately USD 100 million in shares for the full year the stronger Euro, and on-going benefits of Total Systems
2018. The company is maintaining its full year guidance. In Cost efforts were the primary drivers. Since the fourth
2018, the company expects to deliver higher earnings from quarter of 2017, Asia Pacific has been executing planned
continuing operations mainly driven by higher segment asset improvements to upgrade the reliability and flexibility <

glass machinery plants & accessories 4/2018
18