O-I Glass cut its 2026 EBITDA outlook to $925 to 950 million as Europe's segment profit fell to $2 million

How O-I's glass business works

Glass containers are made by melting sand, soda ash, limestone and cullet, which is crushed recycled glass, in furnaces that run around the clock for years between rebuilds. A furnace cannot be switched off for a slow month without cost, so glassmakers carry high fixed costs and a large energy bill, mostly natural gas.

O-I describes itself in the release as a company with about 19,000 employees and 61 plants in 18 countries, with 2025 revenues of $6.4 billion¹. It reports two segments, the Americas and Europe, and sells to brewers, winemakers, distillers, food companies and soft drink bottlers.

Price reaches the buyer through contracts. In its presentation, O-I refers to pass-through on contracted business as part of its 2027 net price outlook, which means some contracts let it pass cost changes on with a lag, while others are reset in commercial talks³. Where costs rise faster than contracts adjust, the gap shows up as a negative net price effect, which is what happened in Europe this quarter.

The deck also describes where demand moved during the quarter.

That split matters for buyers. A wine producer in Southern Europe now negotiates with a supplier whose shipments in that category are falling, while a brewer or food brand in the north faces a supplier whose demand is rising.

What O-I reported on 27 October

Sales. Net sales fell about 2% to $1,623 million from $1,653 million. The presentation’s sales bridge shows currency adding $35 million, while price took away $11 million and volume $54 million³. Sales volume in tons fell 2%, as the release rounds it, while an appendix table in the deck puts the decline at 2.8%.

Earnings. O-I recorded a net loss attributable to the company of $13 million, or $0.08 a share, against net earnings of $30 million, or $0.19 a share. Adjusted earnings were a loss of $15 million, or $0.09 a share, against earnings of $75 million, or $0.48². The deck puts the third-quarter adjusted effective tax rate at about 142%, against 34% a year earlier.

Group profit. Segment operating profit fell to $139 million from $235 million and adjusted EBITDA to $234 million from $329 million, down about 29%. The deck’s profit bridge shows net price taking away $97 million and volume $14 million, with currency adding $7 million and operating costs $8 million³.

The chief executive’s summary. O-I’s CEO set the two regions apart in the release.

The Americas. Segment sales rose to $970 million from $940 million, helped by $42 million of currency. Price rose 1.6%, adding $15 million, and tonnage fell 1.3%, which the deck links to the Andean earthquake and the US and Canada trade dispute, partly offset by growth in Latin America. Segment operating profit was $137 million against $140 million, and the prior year included a one-time $6 million insurance claim benefit that did not recur².

Europe. Segment sales fell to $634 million from $688 million. Price was 3.8% lower, taking $26 million from sales, and tonnage fell 3.7%. Net price after cost inflation took $91 million out of segment profit, which fell to $2 million. The release says energy and freight costs in Europe were about $15 million above what O-I expected entering the quarter.

Guidance. O-I now expects 2026 adjusted EBITDA of about $925 million to $950 million, against $1,000 million to $1,100 million before and $1,218 million in 2025. It expects free cash flow to be a use of about $300 million, against a prior range of a $50 million to $150 million use, and year-end leverage of 4.5 to 5.0 times, against at least 4 times before².

The plant. In late October, the release says, O-I decided to begin a process with employee representatives on the proposed permanent closure of a production facility in Europe. No final decision will be taken until that process ends, and O-I expects fourth-quarter charges of about $100 million to $120 million, including about $40 million to $50 million of future cash spending.

O-I's two segments line by line

The two regions moved in opposite directions on price. In the Americas, O-I raised selling prices 1.6%, but cost inflation still left net price $6 million negative in segment profit. In Europe, selling prices fell 3.8% while costs rose, and the net price effect on profit was $91 million negative, more than the whole fall in segment profit of $93 million, by SPI’s calculation from the deck³.

Volume did less damage than price. Lower volume and mix cost the Americas $10 million of profit and Europe $4 million, according to the presentation. Operating costs helped both regions slightly, by $3 million in the Americas and $5 million in Europe, after gross Fit to Win savings of $18 million and $27 million.

Fit to Win is O-I’s cost programme. The release puts its benefits at about $50 million in the third quarter and $135 million in the first nine months, and cuts the 2026 target to about $180 million from at least $200 million, because the European recovery is slower. The cumulative target of at least $650 million by the end of 2027 is unchanged, and the deck says about $460 million has been delivered to date².

The nine-month figures show how much of the year Europe has lost. Europe’s segment profit was $7 million in January to September 2026 against $253 million, while the Americas rose to $444 million from $416 million. The deck shows price cost Europe $94 million of sales over nine months and $252 million of segment profit, and total shipments were about 5.5% lower³.

The GAAP loss over nine months, $1,058 million or $6.90 a share, includes a goodwill impairment of $873 million, according to the tables. That charge is a write-down of past acquisition value, not cash, but it shows the company has already marked down what its businesses are worth this year.

SPI calculation (where the cash and debt stand): the tables show cash of $379 million on 30 September, against $759 million at the end of 2025, and debt of $183 million short term plus $4,736 million long term. That is total debt of $4,919 million and net debt of about $4,540 million, by SPI’s calculation. Operating cash flow over nine months was a $35 million outflow and capital spending $318 million, a combined outflow of $353 million, by SPI’s calculation.

Who gains and who pays as O-I resets Europe

Wine producers in Southern Europe. The deck names wine in Southern Europe as the weakest category. A winemaker buying fewer bottles has some leverage in the short term, but if O-I closes a plant serving that region, the same buyer may face fewer local furnaces and longer haulage, which O-I already lists as a rising cost³.

Spirits brands. Premium spirits often use heavier or decorated bottles made on fewer lines. The deck groups spirits with beer and wine as alcohol, which it says is lagging food and soft drinks. A plant closure in Europe could tighten supply for specialist shapes even while overall demand is soft.

Food brands. The deck says food and soft drinks are outperforming alcohol in O-I’s sales. Jar and food bottle buyers are less exposed to falling demand but share the same energy and freight inflation, which O-I wants to recover through net price.

Americas buyers. Brewers and food companies in the Americas paid 1.6% more on average in the quarter, by O-I’s figures, and the deck links lower tonnage partly to the US and Canada trade dispute. O-I’s Americas margin of 14.1% leaves it less pressure to push price than in Europe.

Can makers. Crown and AMP grew European shipments 4% and 6% in the quarter while O-I’s European tonnage fell 3.7%, by their own figures. Drinks brands choosing between glass and cans for new lines see one format adding capacity, AMP in the UK and Spain, and the other proposing to cut it.

Employees at the unnamed site. The release says consultation with employee representatives started in late October and that no final decision will be taken until it ends. O-I’s charge estimate includes about $40 million to $50 million of future cash spending, and the release does not say how many jobs are affected.

Lenders and shareholders. Net debt of about $4,540 million, by SPI’s calculation, against a guided EBITDA of about $925 million to $950 million, puts year-end leverage at 4.5 to 5.0 times, O-I’s own range. Senior secured net leverage was 1.37 times against a 2.5 times covenant, the deck says³.

The pinch point: energy contracts and an idle furnace

The deck explains much of the European problem with one number. O-I’s 2026 guidance includes an energy reset headwind of about $150 million, because favourable European energy contracts expired in December 2025, plus about $100 million of further energy and freight inflation that it ties to conflicts in the Middle East³.

Glassmakers cannot easily shed that cost. A furnace that runs below capacity still burns gas to stay hot, and O-I reports temporary curtailments, meaning production cut back to match demand, cost $9 million in Europe in the third quarter. Inventory is elevated on soft demand, the deck says, and working capital will be a headwind of more than $100 million in 2026.

That is the setting for the proposed closure. Taking one European site out removes fixed cost and lifts use of the remaining furnaces, but the release puts the fourth-quarter charge at about $100 million to $120 million, and O-I has not said which country or how much capacity is involved.

O-I’s European recovery plan has four levers in the deck: net price through commercial execution, a multi-year energy approach, profitable volume, and plant and supply chain efficiency. It says new business wins so far this year amount to about 4% of volume.

How O-I compares with Crown and Ardagh Metal Packaging

Three packaging makers that sell drinks containers in Europe and the Americas reported their third quarters between 19 and 27 October. Crown published on 19 October, AMP on 22 October and O-I on 27 October, and all three report in US dollars, though on different profit measures.

Crown’s net sales rose to $3,711 million from $3,202 million, including $405 million of passed-through material costs, and segment income was $484 million against $490 million, its release shows⁴. Its European beverage shipments rose 4%.

AMP’s revenue rose 19% to $1,694 million, mostly on passed-through input costs, and adjusted EBITDA rose 2% to $213 million. Its European shipments rose 6% and its Europe adjusted EBITDA rose to $91 million from $82 million⁵. AMP raised its 2026 guidance, and SPI’s AMP story covers its plan for new lines in the UK and Spain.

By SPI’s reading, the difference is pass-through. Both can makers passed higher input costs on to customers and kept or grew profit, while O-I’s European net price was negative after costs. Aluminium cans carry metal costs that many contracts pass through by formula; glass carries energy costs that O-I is still trying to recover.

What the PPWR changes for glass bottle and jar buyers

The EU Packaging and Packaging Waste Regulation (PPWR) has applied in every Member State since 12 August 2026, under SPI Regulation Tracker record PR-EU-001⁶. Most of its design rules start in 2030, and three of them bear on how much single-use glass European brands buy.

From 2030 final distributors must offer at least 10% of beverages in reusable packaging, under record PR-EU-006, but milk, wine, aromatised wine and spirits are excluded⁷. Guidelines on which beverages are covered are due by 12 February 2027. For O-I’s wine and spirits customers the reuse target does not apply, while beer and soft drink brands may move part of their volume into refillable bottles.

Mandatory deposit systems by 1 January 2029 cover single-use plastic bottles and metal containers up to three litres, not glass, under record PR-EU-007. A Member State may add single-use glass bottles, and deposits are not mandatory for wine, spirits and milk⁸.

All packaging must be recyclable under record PR-EU-010, with the graded A, B and C test applying from 1 January 2030 or 24 months after the criteria acts, whichever is later⁹. Clear soda-lime glass faces fewer open questions than opal, crystal or glass with ceramic closures, which several EPR schemes already penalise.

Fees move the same way. SPI’s glass EPR fee comparison found 2026 household glass rates from EUR 19.14 to EUR 108 per tonne across nine euro schemes, and CONAI in Italy rises from EUR 40 to EUR 48 per tonne in 2027, citing low cullet values and falling wine and drinks demand¹⁰. Those are euro fees paid by brands, separate from O-I’s dollar figures.