O-I Glass, Inc.

Good day and thank you for standing by. Welcome to the OI Glass full year and fourth quarter 2021 earnings conference call. At this time, all participants are in the listen-only mode. After prepared remarks, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please limit yourself to one question and one follow-up. Please be advised that this conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Chris Manuel, Vice President of Investor Relations. Please go ahead.

Thank you, Jerome. And welcome, everyone, to the OI Glass full year and fourth quarter 2021 earnings call. Our discussion today will be led by Andres Lopez, our CEO, and John Hodrick, our CFO. Today, we will discuss key business developments and review our financial results. Following prepared remarks, we will host a Q&A session. Presentation materials for this earnings call are available on the company's website. Please review the Safe Harbor comments and our disclosure of the use of non-GAAP financial measures included in those materials. I'd now like to turn the call over to Andreas, who will start on slide three.

Good morning, everyone. I appreciate your interest in iGlass. Let me start by thanking the OI team. I truly appreciate your high level of engagement, agility, and focus on execution over the past year, which helped us achieve our commitments and advance OI's strategy. Last evening, we reported full year 2021 adjusted earnings of $1.83 per share and free cash flow of $282 million. Both earnings and cash flow exceeded our original guidance and our most recent business outlook. Four-quarter adjusted earnings were $0.36 per share, which also exceeded our business outlook as we closed the year on an exceptionally strong note, with sales volumes up more than 5%, excluding divestitures. February 2021 results reflected a strong rebound from 2020, which was impacted by the onset of the pandemic. Sales volumes was up 5.3%, and production volume improved significantly. Importantly, our 2021 shipments exceeded pre-pandemic levels, reflecting a strong consumer preference for premium and sustainable glass packaging. Higher average selling prices upset around 80% of elevated cost inflation. This was quite a feat given inflation was nearly double what we expected heading into the year. So there was good momentum passing through incremental inflation. Earnings also benefited from our successful margin expansion initiatives, along with continued strong operating performance. As we will review shortly, we continue to take the bold structural actions to advance OISE's strategy. This includes all facets of the business, including structural actions to improve margin and investments to support organic growth. Likewise, we are developing our proprietary magma solution, addressing legacy liabilities and optimizing our structures. On the right, we have shared a dozen key financial measures. As you can see, we are making solid progress across all dimensions of the business. This reflects a much more agile organization capable of effective execution, resulting in solid progress during 2021. There is great momentum at OI, and we are optimistic for 2022. We expect improved adjusted earnings and a strong adjusted free cash flow. Adjusted earnings should improve to between $1.85 to $2 per share. We expect higher adjusted earnings despite an anticipated $0.18 impact from the combination of unfavorable effects, higher interest as we fund the part of trust, and dilution from the restitures as we optimize our portfolio. Excluding funding the part of trust, we expect free cash flow of at least $125 million. Likewise, a strong adjusted free cash flow should exceed $350 million, which excludes elevated expansion capex that is fully funded, as we read Floyd proceeds from the best. Reflecting good momentum, we expect first quarter earnings will improve from prior year results. John will expand on our financial performance and outlook a bit later. Let's move to page four as we review recent sales volume trends adjusted for the best. The chart illustrates our sales volumes over the past five years, which, of course, reflects the disruption from the pandemic. On a CAGR basis, our sales volumes have been stable over this period. Keep in mind, annual shipments have increased about 1.5% on average when including our JVs, which is more indicative of underlying glass demand. As I just noted, shipments were up 5.3% in 2021 as we recovered from the onset of COVID. Importantly, shipments improved 1.1% from pre-pandemic levels in 2019 as we saw solid growth across nearly all markets and in use categories. Stronger glass demand reflects flexibility amid ongoing challenge shifts, consumer preference for premium products, consumer preference for localization of supply, and the favorable sustainability attributes of glass. This was achieved despite ongoing supply chain challenges and reflects increased agility and improved commercial and operating capabilities. Strong demand continued through the fourth quarter as shipments were up more than 5% from the prior year. The Americas was down slightly reflecting peak asset project activity combined with record low inventory levels. However, shipments were up a robust 13% in Europe. In particular, wine was very strong in southern Europe as we exited the year. Strong demand continued into the new year and general shipments were up more than 3% from the prior year period. Amid continued robust demand for glass containers, we expect OISA's volume will grow up to 1% in 2022. This growth will be served by increased productivity and asset projects that will add the equivalent of a furnace across our enterprise. Additionally, we are building new capacity that should be online in early 2023 to serve premium categories in attractive growing markets. For the next three years, we anticipate organic growth will average 1% to 2% per year across our consolidated network as the incremental capacity comes online. Let's turn to slide five. As we exceeded our financial commitments, we also made very good progress advancing OASIS strategies. In fact, we achieved all of our key objectives this past year. Our highly successful margin expansion initiatives boosted earnings $70 million, which exceeded our target of $50 million. With Magma, we aim to create new profitable business models that will revolutionize the glass market. We achieved critical milestones in 2021 as we validated our Magma Generation 1 line at Holzminden, and we are currently testing Key Generation 2 technologies at our street pilots. As we rebalance the dialogue on glass, our glass advocacy digital marketing campaign generated 1.3 billion impressions, reaching more than 105 million people in the U.S. We are off to a great start in the first year of this much-needed creative and effective program. Likewise, we advance our ESG agenda and our efforts are being recognized. I invite you to review the sustainability page in our appendix, which summarizes the meaningful ESG improvement at OI noted by the likes of Sustainalytics and EcoAddis, to name a few. We also made great progress as we optimized our structure by rebalancing our business portfolio and improving the balance sheet. Our portfolio optimization program is advancing swiftly. As discussed at Investor Day, we announced up to $680 million of future expansion initiatives, including up to 11 magma lines, which will be substantially funded by our portfolio optimization program. We are also making great strides resolving legacy liabilities. Back in April, we established an agreement in principle for Paddock's consensual plan of reorganization. A few weeks ago, the plan of reorganization was submitted to the court. Likewise, we have significantly reduced the unfunded position on our legacy pension plans. As a result of our efforts, we nearly doubled our free cash flow and net debt is now at the lowest level since mid-2015. Finally, we advanced our efforts to establish a simple, agile organization as we completed the first two phases of our new strategic managed services partnership with Accenture. I firmly believe 2021 represents a step-function improvement for OI, and I'm confident that we will continue to accelerate our transformation in 2022. On basics, we have laid out our key strategic objectives for 2022 aligned with the six key priorities we share at our recent investor day. As we seek to expand margins, we intend to achieve higher selling prices that will offset last year's favorable spread and recover the impact of 2022 cost inflation. We will also continue our highly successful margin expansion initiatives which should yield at least an incremental $50 million of benefits. Next, we intend to profitably grow our business in premium categories in key strategic markets. We will substantially complete the expansion initiatives in Colombia and Canada this year, which are currently underway leveraging legacy technology. Future expansion will increasingly utilize our magma technology, including the next wave of projects in Peru and Brazil. Our expansion projects are substantially backed by long-term customer agreements. We will complete our current $1.5 billion portfolio optimization program in 2022. Remaining proceeds should be received prior to significant expansion reinvestment. We also intend to resolve legacy investors' liabilities in the first half of 2022 and further de-risk our pension plans. We expect to complete our multi-generation magma development plan over the next few years. In 2022, we will have Gen 1 fully optimized and plan to validate the Gen 2 pilot. Likewise, we will continue to advance our Generation 3 solution and the ultra-lightweighting initiative. We aim to further enhance glass's already attractive sustainability profile. We will reduce our greenhouse gas emissions by 5 to 10 percent and source 30 to 35% of our electricity from renewable energy sources. Along these lines, we will continue to expand our glass advocacy campaign with focus on multiple end-use categories. Through continued discipline execution, we aim to deliver on these commitments and many more critical milestones in 2022 that we believe will increase the stakeholder value. Now over to John. Thanks, Andres, and good morning, everyone.