O-I Glass (OI) Q4 2024 earnings summary

Executive summary

• 2024 was marked by sluggish demand, high inventories, and macroeconomic headwinds, resulting in lower earnings and sales compared to 2023, but stabilization began late in the year as the Fit to Win program was rapidly implemented to drive recovery in 2025.

• Adjusted EPS for 2024 was $0.81, down from $3.09 in 2023, but slightly above guidance; Q4 saw an adjusted loss of $0.05 per share.

• Management expects a significant recovery in 2025, targeting adjusted EPS of $1.20–$1.50 and free cash flow of $150–$200 million.

• Strategic initiatives under Fit to Win focus on cost reduction, network optimization, and operational efficiency, with $175–$200 million in cost savings targeted for 2025.

• Market conditions stabilized in late 2024, with early 2025 sales volumes up low single digits in both Americas and Europe.

Financial highlights

• Net sales for 2024 were $6.53 billion, down from $7.11 billion in 2023, due to a 2% drop in selling prices and 4% lower sales volume year-over-year.

• Adjusted EBITDA for 2024 was $1.1 billion, with higher interest and tax expenses impacting EPS.

• Free cash flow was a $128 million use of cash in 2024, compared to a $130 million source in 2023, aided by working capital management.

• Leverage ratio increased to 3.9x at year-end due to lower EBITDA.

• CapEx was $617 million in 2024, down from $688 million in 2023, and is expected to decline further in 2025.

Outlook and guidance

• 2025 adjusted EPS guidance is $1.20–$1.50, a 50–85% increase over 2024.

• Adjusted EBITDA projected at $1.15–$1.2 billion for 2025.

• Free cash flow expected at $150–$200 million, with CapEx forecast at $400–$450 million.

• Fit to Win initiatives are projected to deliver $175–$200 million in cost savings in 2025 and at least $300 million by 2027.

• Guidance assumes flat or slightly lower sales volumes and continued competitive pricing pressures, especially in Europe.

• Restructuring costs of $120 million are embedded in the 2025 outlook.

• 2027 targets: at least $1.45 billion EBITDA, free cash flow ≥5% of revenue, economic spread >2%.