Despite the global recession, bottle glass maker Owens-Illinois Inc. had one of its best years in 2009 in terms of earnings and cash flow, and the changes it has made since 2007 have it positioned well for 2010 as the recession recedes, the company's top executive said yesterday.
Speaking at O-I's annual shareholder meeting, held at the company's campus in Perrysburg, Chairman and Chief Executive Officer Al Stroucken said the firm "remained strong and financially stable," as he predicted a year ago even amid the recession. He pointed to the firm's performance last year, from its profits to its cash flow, even though its $7.1 billion in sales was down from the year before. It reported a profit of 95 cents a share last year.
The company weathered 2009 because it "remained focused on changing strategic priorities and adapted business to changing conditions and the economic climate," Mr. Stroucken said.
O-I last year avoided piling up excess inventory by sticking with a 2007 plan to match supply with demand, the CEO said. "This required temporary production curtailments in all regions, which were an enormous burden on the individuals who work in our plants," he added.
But the moves let O-I cull inventories by 11 percent from 2008 and was the key to its $372 million in cash flow. "This was really in sharp contrast to previous recessions where volume drops of 2 and 3 percent wiped out nearly all our profitability and certainly our cash," the CEO said.
He said he didn't expect "any more major restructuring in the foreseeable future."
The company last year negotiated contracts with customers that allowed for more cost pass-throughs and was able to make lighter bottles, lower production costs, and reduce emissions at its factories, he said.
Moving through 2010, the company has "addressed many of the issues that have been holding us back, and we are beginning to see signs of an economic recovery," Mr. Stroucken said.
"I'm confident that O-I will continue to prosper and that we'll continue to increase shareholder value," he added.
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