O-I Glass, Inc. /DE/ Q4 FY2025 earnings call

• Full year 2025: Adjusted earnings were $1.60 per share, free cash flow rebounded to $168,000,000. Fit to Win delivered $300,000,000 in benefits in 2025, offsetting macroeconomic pressures.
• Fourth quarter: Adjusted earnings increased meaningfully vs prior year. Fit to Win continued to drive savings, with Phase A (SG&A streamlining) generating ~$180,000,000 in 2025 and Phase B (end-to-end value chain transformation) delivering ~$120,000,000 in 2025.
• 2026 outlook: Anticipates stable top line, adjusted EBITDA of $1.25 to $1.30 billion (up to 7% growth vs 2025), adjusted EPS of $1.65 to $1.90, and free cash flow ~$200,000,000.
• Progress towards 2027: Reaffirming 2027 Investor Day financial targets, with Fit to Win cumulative target increased to at least $750,000,000.

In the Americas, segment operating profit rose 40% in Q4 2025, driven by higher net price and Fit to Win benefits. Volumes declined 10%, with factors like affordability challenges, consumer behavior, weather, and trade policies. In Europe, segment operating profit increased 8% in Q4 2025, reflecting strategic initiatives and higher production after inventory reductions. Volumes declined 3.5%, with consumption down and shipment impacts from order patterns. Americas contributed a 40% increase in segment operating profit, while Europe saw an 8% increase.

• Reaffirm 2027 Investor Day financial targets.
• 2026 adjusted EBITDA expected to be $1.25 to $1.30 billion (up to 7% growth vs 2025), including an estimated $150,000,000 energy cost step up.
• Adjusted EPS projected to be $1.65 to $1.90.
• Free cash flow expected to approximate $200,000,000.
• Fit to Win expected to deliver at least $275,000,000 of additional savings in 2026, with cumulative target increased to $750,000,000.

• Macro-economic pressures impacting volumes and market conditions.
• Inventory adjustments in segments like Americas beer and spirits.
• Geopolitical and trade policy impacts on consumption and shipments, affecting volumes and inventory levels.

Q: Ghansham Panjabi asked about the 10% volume decline in the Americas in Q4 2025 and 2026 volumes.

A: Gordon J. Hardie said somewhere up to half of the volume decline was due to industry or inventory adjustments, with high stocks in spirits, and expected inventory adjustments to continue in Q1 2026 but Fit to Win helping overcome short-term issues.

Q: Kyle Benvenuto inquired about the volume outlook and Fit to Win.

A: John A. Haudrich said the 2026 volume outlook includes mix management efforts, including exiting unprofitable business. Gordon J. Hardie unpacked volume components, noting share gain, restocking, and customer inventory management impacts.

Q: Anojja Aditi Shah asked about the increased cost savings target and supply chain forecasting.

A: John A. Haudrich said the increased target helps mitigate commercial environment uncertainty. Gordon J. Hardie mentioned supply chain forecasting success rate jumped to 68-69% in 2025, with new chief supply officer focusing on stripping waste.

Q: Michael Andrew Roxland asked about reorienting the portfolio and go-to-market model.

A: Gordon J. Hardie said reorienting towards higher growth segments, and revamping go-to-market with better insights and sales management, starting to see growth in beer and spirits.

Q: Arun Shankar Viswanathan asked about volume trajectory in 2026 and free cash flow.

A: John A. Haudrich said Q1 2026 has tough comps, transitioning to flat or low growth in back half, with free cash flow levers on EBITDA and working capital.

Q: Bryan Nicholas Burgmeier asked about curtailments and tariff prebuy impact.

A: John A. Haudrich said capacity utilization improving, with Europe reducing excess capacity, and stabilization in impacted markets.

Q: Francisco Ruiz asked about European market dynamics and can-to-glass move.

A: Gordon J. Hardie said Europe has more spare capacity but improved pricing, and can-to-glass move has slowed in North America but seen in Europe.

Q: Richard Carlson asked about inventory and quarterly cadence.

A: John A. Haudrich said FX impacts inventory, progress on IDS targets, and quarterly cadence reflecting balanced H1 and H2 with potential upside from events like World Cup.