O-I Glass, Inc.

Thank you for standing by and welcome to the OI third quarter 2020 earnings conference call. All lines have been placed on mute to prevent any background noise. After the presentation, there will be a question and answer session. Any instructions on how to do so will be given at the appropriate time. Thank you. Mr. Chris Manuel, you may begin.

Thank you, Em, and welcome everyone to the OI Glass third quarter earnings call. Our discussion today will be led by Andres Lopez, our CEO. and John Haudrich, our CFO. Today we will discuss key business developments and review our financial results. Following prepared remarks, we'll host a Q&A session. Presentation materials for this earnings call are available on our website at o-i.com. Please review the Safe Harbor comments and disclosure of our use of non-GAAP financial measures included in those materials. Some of the financials we will be presenting today will relate to non-GAAP measures, such as adjusted earnings per share, Free Cash Flow, Segment Operating Profit, Leverage Ratio, and Net Debt, which exclude certain items that management considers not representative of ongoing operations. A reconciliation of GAAP to non-GAAP can be found in the press release and in the appendix to this presentation. I'd now like to turn the call over to Andres, who will start on slide three.

Thanks, Chris. Good morning, everyone, and thank you for your interest in iGlass. I want to start off by recognizing all of our employees and, worldwide, and, in particular, our frontline team in the factories. Our employees have worked hard every day in challenging conditions to ensure we safely manufacture the glass containers needed to keep the food and beverage supply chain operating. With great attention to health and safety, all of our plants are now fully operational and performing well. This hard work by our team produced a strong rebound for the third quarter. Thank you all. Last night, we reported results for the third quarter of 2020. Our adjusted earnings were 41 cents per share and free cash flow was $205 million. Third quarter volume increased nearly 2% compared to the prior year, as shipments were fairly stable across the quarter. Demand was strongest in the Americas, led by our North America business unit. Overall consumption levels haven't changed much over the course of the pandemic. However, demand has shifted from on-premise to off-premise given public health restrictions. Amid this shift, as expected, consumers have maintained a strong preference for healthy, premium, and sustainable glass packaging regardless of the venue. We continue to advance our strategy. Our turnaround initiatives are gaining momentum and improved operating performance substantially offset the impact of lower production during the third quarter. as we seek to optimize our structure proceeds on the sale of our agency business unit were applied to the reduction. All the while, we have continued to develop magma as we seek to revolutionize glass manufacturing. We believe all these actions will create value for our shareholders. On an encouraging note, our business outlook continues to improve. Given a solid quarter, we now expect full year sales volume will be down about 3% to 5% in 2020 compared to 4% to 7% decline in our previous outlook. As conditions have somewhat stabilized, we are reinstating earnings guidance for the quarter, which we expect will approximate $0.30 to $0.35 per share with sales volume comparable to the prior year leverage. With year 2020 cash flow should also compare favorably to the prior year. We are also providing some preliminary thoughts on 2021. where the outlook for earnings and cash flows will improve versus 2020 levels. Of course, the pandemic continues, so any outlook is subject to adjustment as public health trends evolve. Let me provide an update on our achievements trends which have stabilized over the past several months. I'm now on slide four. Consistent with previous presentations, this chart provides two sets of information. On the left, You will see OI's recent shipping trends. On the right, we are presenting key retail purchase trends across several categories and geographies. Let me share some thoughts starting with OI. While our volumes were stable for most of the first quarter, the pandemic abruptly disrupted orders in April and May. As many markets reopened, volumes recovered significantly in June and have been stable to higher each month of the third quarter. With most of October behind us, sales volume this month is up slightly compared to last year. Reflecting recent trends, we anticipate four-quarter shipments will be flat to slightly after the prior year. Let's shift to the retail patterns on the right. As you can clearly see, off-premise sales have remained elevated since the pandemic, consistently higher depending on category. This makes sense considering the sharp fall-off in demand at bars and restaurants. While retail trends remain strong, growth has moderated more recently as on-premise locations started to reopen some during the third quarter. Let me make two key observations. First, for why the strong retail activity is generally upsetting the lost sales from bars and restaurants, with consumer consumption trends balanced over all. We are pleased with the ability of our customers and supply chains to quickly adapt, and Glass is doing well with this consumer channel shift. Second, it is not possible for the supply chain to snap back and fully restock inventories immediately after the disruptive second quarter. Frankly, our customers and the overall food and beverage supply chain is not equipped for this type of surge. At present, we believe most end markets are reasonably well served, but the overall supply chain will likely remain in flux for the foreseeable future. So we think demand will continue to improve, but these patterns could remain choppy until fully rebalanced. Bottom line, we are serving our customers' needs well and are confident that our achievement levels will return to pre-pandemic levels and continue to grow off that base, particularly as new product development activity remains at an elevated level. While we contend with the pandemic, we are highly focused on executing Our long-term strategy to create shareholder value. I'm now on slide five. I want to update you on the bold structural actions we have taken to improve the company's business fundamentals. We continue to make great progress with our turnaround initiatives, which have proven to be the perfect platform to help navigate the pandemic. I'm proud to say that our operating performance continues to improve, which reflects the contribution of these turnaround initiatives. Keep in mind, production was down 10% from last year as we ramped up capacity after the challenging second quarter. This was a $46 million earnings headwind, which was substantially offset by operating improvement and plant productivity that is now back to pre-pandemic levels. Likewise, our new brownfield plant in Geroncourt is now operational. I want to thank the thousands of IT members who helped us with these achievements. Magma continues to advance, and we reached several key technical milestones during the quarter. The Magma Generation 1 installation at Holzminden, Germany, remains on track for the first quarter of 2021. This will be an important development to pave the way for broader Gen 1 deployment commencing in 2022 and beyond. Additionally, we recently entered into a strategic collaboration agreement with Krons AG the global leader in food and various processing and filling technologies. Together, we can improve glass filling line speed and efficiency, enhance ability to respond to market trends, and develop innovative and sustainable glass systems. Finally, we aim to optimize our structure by rebalancing our portfolio and strengthening our balance sheet. We have completed a number of divestitures with total proceeds in excess of $870 million, including the sale of A&Z and an attractive multiple during the third quarter. As a result of these transactions and favorable cash flow, we have significantly reduced net debt over the past year. Our tactical divestiture program continues and we expect to complete that program next year with additional proceeds to accelerate further debt reduction. I firmly believe these are the right steps for our customers, our employees and our investors. Furthermore, I remain highly confident in our ability to execute across these fronts and unlock shareholder value. Advancing to slide six, I would like to talk about how we are further elevating sustainability at OI. We are focused on being the most innovative, sustainable, and chosen supplier of brand building packaging solutions. As you know, our sustainability program is aligned with the United Nations Sustainable Development Goals. Consistent with this focus, we are elevating Let me note a few recent steps on our journey. First, we recently appointed our first chief sustainability officer, a position that reports directly to me and will ensure ESG initiatives are advanced. Second, we achieved our vision. We have broadened our sustainability initiatives and goals for next several years. This includes actively developing the U.S. glass recycling system, building on the successful model in Europe where glass recycling outpaces all other packaging materials. Third, we have initiated a glass advocacy campaign initially focused in the U.S. This effort will ensure a balanced public discussion on the inherent sustainable nature of glass. More broadly, the campaign will emphasize the many benefits of our product, including the healthy, premium, and brand-building characteristics of glass. OI is also at the forefront of transformational glassmaking technologies, and our magma innovations will set new standards in the industry in many areas, including lightweighting and sustainability overall. Finally, we are preparing our next sustainability report for 2021, which will have much more detail on these initiatives. Next, let me turn the presentation over to John, who will provide some detail on the finances.