O-I Glass (NYSE:OI) executives told investors the company closed 2025 with improving earnings, expanding margins, and rebounding free cash flow, supported by continued progress in its Fit to Win cost and network optimization program. Management also laid out a 2026 outlook calling for further earnings growth despite a still-challenging demand environment and an expected step-up in European energy costs.
Full-year 2025 results: earnings and cash flow improved
Chief Executive Officer Gordon Hardie said O-I reported full-year adjusted earnings of $1.60 per share, with adjusted earnings “nearly doubled versus 2024,” and free cash flow of $168 million. He said results were in line with the company’s most recently upgraded guidance and reflected progress against strategic objectives.
Management also cited a major project startup in Europe that impacted shipments by nearly 1% and said it continued to pursue “pockets of growth” in higher value categories such as premium spirits, food, non-alcoholic beverages (NABs), and ready-to-drink products (RTDs), which outperformed mainstream beer and wine trends. The company said it shifted its mix about 1% toward a higher quality book of business and believed it maintained modestly improved market share.
Hardie said adjusted EBITDA increased 11% with margins expanding 220 basis points, as Fit to Win benefits more than offset modest pressure from net price and volumes. Free cash flow improved by approximately $300 million versus the prior year, driven by higher adjusted earnings, working capital management, and a 30% reduction in capital expenditures, even after $128 million of restructuring payments that are expected to taper after 2026. Leverage improved to 3.5, and management said it remains on track to reach approximately 2.5 by year-end 2027.
Fit to Win savings accelerate; 2027 cumulative target raised
Hardie said Fit to Win delivered $300 million of savings in 2025, exceeding the initial target of at least $250 million, including about $80 million in the fourth quarter. For 2026, the company expects at least $275 million of additional savings.
Given execution to date, O-I raised its three-year cumulative Fit to Win benefit target to at least $750 million, up from $650 million. Hardie said the increase was driven by upside opportunities, especially within Phase B initiatives, rather than being a direct reaction to lower volumes.
- Phase A (SG&A streamlining and initial network optimization) generated about $180 million of benefits in 2025; O-I expects an additional $135 million in 2026 as it advances later-stage SG&A efforts and completes the previously announced elimination of about 13% of excess capacity by mid-2026, with remaining actions primarily in Europe.
- Phase B (end-to-end value chain transformation) delivered about $120 million in 2025, ahead of expectations; the company anticipates at least $140 million in 2026, supported by rollout of Total Organization Effectiveness (TOE) across the plant network and accelerated procurement and energy initiatives.
Fourth-quarter details: profit rebound and segment performance
Chief Financial Officer John Haudrich said O-I delivered fourth-quarter net sales of approximately $1.5 billion, with average selling prices essentially flat and favorable FX largely offsetting a mid-single digit decline in volumes. Adjusted earnings improved to $0.20 per share from a net loss in the prior-year quarter, driven by Fit to Win benefits, higher production levels, and a lower effective tax rate, partially offset by modest net price pressure and softer volumes.
Segment operating profit increased 30% to $177 million, with margins up 280 basis points.
In the Americas, segment operating profit rose 40% on higher net price and Fit to Win benefits. Volumes fell 10%, concentrated in beer and spirits. Management said roughly half of the decline reflected lower consumption tied to affordability challenges, consumer behavior changes, and weather disruption in Brazil, while evolving U.S. trade and immigration policies contributed to inventory adjustments in the U.S. and Mexico. Results also included a one-time $6 million insurance settlement related to a prior-year event.
In Europe, segment operating profit increased 8%, reflecting strategic initiatives and higher production following inventory reductions last year. Net price was a headwind and volumes declined 3.5%. Management cited low single-digit consumption declines and customer order pattern shifts; wine and food shipments were stable to slightly higher, while beer and spirits remained soft. The company said actions to eliminate excess capacity are expected to be completed in the first half of 2026, improving Europe’s operating trajectory.
2026 outlook: stable topline, higher EBITDA, energy step-up in Europe
Looking ahead, Haudrich said management expects 2026 net sales to be stable or modestly higher, supported by slightly better gross price and favorable FX, while sales volumes are expected to be flat or slightly down. The company said it plans to continue mix management, including exiting unprofitable business while pursuing growth in higher-value categories.
O-I guided to adjusted EBITDA of $1.25 billion to $1.3 billion, representing up to 7% growth versus 2025. The outlook includes an estimated $150 million European energy cost step-up as favorable energy contracts expire. Haudrich described the impact as “pretty much a kind of a one-and-done” reset, noting the prior multi-year contracts were priced before the Russia-Ukraine war, and that the company has layered in new contracts and hedges for 2026.
Adjusted EPS is expected to be $1.65 to $1.90, assuming a tax rate of 30% to 33%. Free cash flow is expected to approximate $200 million, reflecting higher earnings partly offset by capital expenditures of about $450 million and approximately $150 million of restructuring cash costs.
Management flagged the first quarter as the toughest year-over-year comparison, citing prior-year tariff prebuying, a one-time insurance recovery, and a seasonally higher tax rate, with volumes likely down mid- to high-single digits. Haudrich said volumes should improve through the year—moving closer to flat in the second quarter and into low- to mid-single digit growth in the back half—assuming easier comparisons and continued Fit to Win ramp, including European capacity actions and TOE implementation.
Strategic and market themes: inventory, portfolio mix, and commercial changes
During Q&A, Hardie said inventory adjustments in North America—particularly in beer and spirits—remained a headwind, with spirits inventories still elevated versus historical averages. He said Fit to Win helped the company “overcome” short-term inventory swings, while O-I pursued growth pockets in areas such as food and NABs, including what he called strong demand in waters in North America.
Management said the 2026 volume outlook includes the impact of exiting unprofitable business. Hardie referenced prior commentary that about 4% of total volume was “deeply negative” economic profit business, and said the company saw about a 1% movement in that book over the last year and expects to continue to “chip away,” potentially another ~1%.
Executives also described efforts to improve demand forecasting and supply chain efficiency with customers. Hardie said forecast accuracy improved from about 50% early in the effort to about 68% to 69% through 2025, and noted a new Chief Supply Officer has started with a focus on stripping waste from the supply chain.
On commercialization, Hardie said O-I is revamping its go-to-market model, calling the company’s historical approach “traditional” and noting it had not changed materially in 10 to 15 years. He described a shift toward better insights and more rigorous sales management, including tighter account management and accountability. He also said the company is reorienting its portfolio toward higher growth and higher margin segments such as NABs, waters, juices, and food.
Hardie and Haudrich said O-I is reaffirming its 2027 Investor Day targets, emphasizing progress in adjusted EBITDA and margins, free cash flow conversion, and balance sheet strengthening, while acknowledging ongoing macro uncertainty and affordability pressures.
About O-I Glass (NYSE:OI)
O-I Glass, Inc is a leading global manufacturer of glass containers, supplying the food and beverage, wine and spirits, pharmaceutical, cosmetic and personal care industries. Headquartered in Perrysburg, Ohio, the company produces a broad range of glass packaging solutions, including bottles and jars, designed to meet customer specifications for size, shape, color and performance. O-I leverages proprietary technologies in forming, decoration and quality control to serve both mass-market and premium brands.
Tracing its origins to the early 20th century through the merger of prominent regional glassmakers, the company adopted the Owens-Illinois name in 1929 before rebranding as O-I Glass in 2015.
