O-I Glass, Inc.

Good day and thank you for standing by. Welcome to the OI Glass first quarter 2022 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, 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. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Mr. Chris Manuel, Vice President of Investor Relations. Please go ahead.

Thank you, Rain, and welcome everyone to the OI Glass first quarter 2022 earnings conference 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 financial results. Following prepared remarks, we'll host a Q&A session. Presentation materials for this call are available on the company's website. Please review the Safe Harbor comments and the disclosure of non-GAAP financial measures included in those materials. And now I'd like to turn the call over to Andres, who will start on slide three.

Good morning, everyone. I appreciate your interest in eyeglass. We reported strong first quarter results last evening. Adjusted earnings of 56 cents per share significantly exceeded guidance primarily due to better-than-expected shipments and production levels. As illustrated on the left, earnings improved across all key measures, with adjusted EPS up 60% from the prior year. Shipments increased nearly 6.5%, reflecting a strong demand for healthy, sustainable glass containers, and growth was most pronounced in Europe. The team did a great job increasing the speed and efficiency to boost production to meet demand amid historically low inventory levels. In the Americas, the business also rebounded from the impact of winter storm Uri last year. As expected, higher selling prices across all markets, more than upset elevated cost inflation, and favorable performance reflected the benefits of our ongoing margin expansion initiatives. Our hearts go out to all those impacted by the tragic conflict in Ukraine. Keep in mind, we do not have operations in Ukraine or Russia, so we have not been directly impacted. However, these developments have complicated an already challenging situation, even elevated cost inflation and supply chain issues. As I will discuss later, OI continues to demonstrate increased agility and execution discipline delivering on its commitments despite elevated macro uncertainty. As we manage through a highly volatile environment, we continue to make very good progress on our transformation. Our multi-year margin expansion initiatives are off to a good start this year. We are investing in expansion, we are advancing magma, ESG, and our glass advocacy campaign. Likewise, we are optimizing our portfolio and addressing legacy liabilities. As announced yesterday, PADOC recently achieved another key milestone as voting asbestos claimants overwhelmingly approved the proposed plan of reorganization. PADOC is now entering the final phase of the Chapter 11 process and we remain optimistic that PADOC will resolve its legacy asbestos liabilities by mid-2022. Finally, we are increasingly optimistic for our business outlook, reflecting strong first quarter results and good momentum. We expect higher second quarter results and we have raised the top end of our earnings guidance range. 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. As you can see on the chart, demand has been exceptionally strong as the momentum that began in the fourth quarter continued through the start of this year. Sales volumes accelerated this month of the first quarter, which increased 6.4 percent compared to the prior year. Cheapness increased across all key geographies. The Americas was up more than 3 percent and Europe view almost 10 percent, even as both regions implemented sizable price increases to offset elevated cost inflation. We believe there are several key drivers for recent strong demand. Glass is benefiting from consumption trends that emerged over the course of the pandemic, such as increased at-home dining, where people seek a more healthy and premium experience. As COVID recedes and markets reopen, in many geographies, product demand is up. On-premises is rebounding across the globe, and we are seeing a strong demand across all markets, including European wine and spirits, which are exported across the globe. At the same time, glass historically imported from Russia and Ukraine has been displaced due to the recent conflict, which is driving up demand for locally produced glass in Europe. Overall, food and various product inventories remain far below pre-pandemic levels, and many markets we serve continue to be well oversold, especially in Europe and Latin America. Finally, glass is increasingly more competitive compared to alternative substrates, reflecting relative input cost and availability. Keep in mind that 90% of our glass is chipped within around 500 miles of our plants, and more than 85% of our inputs are locally sourced. As a result, global supply chain issues have been less impactful on glass than other substrates, and glass is well aligned with the emerging preference for local supply chains. Reflecting these ongoing trends, we expect seedlings will grow low single digits in the second quarter despite the difficult 18% growth comparison from last year. Given recent positive momentum, we now expect our full year sales volume will be at the high end or exceed our original guidance range of up to 1% growth in 2022. Of course, we continue to monitor macro trends, which could affect this outlook. As I mentioned, we are facing capacity constraints in key markets as we manage record low inventory levels. Given this challenge, we have been leveraging the global capability to increase productivity that we developed over the past few years. As a result, we are enjoying the benefits of increasing manufacturing speeds and efficiencies to boost production to better meet the strong demand. Likewise, we are mix managing our business to improve margins and support our strategic customers' growth ambitions. Keep in mind that we will be adding substantial new capacity over the next few years to support demand growth. Let's turn to slide five. On top of favorable near-term performance, we continue to advance our transformation. We are expanding our margins. During the first quarter, we successfully raised selling prices as we offset cumulative cost inflation. Faced with incremental inflation pressure, we have implemented a second price increase starting in the second quarter. Overall, we are confident OI will meet its full year net price objective. Likewise, our margin expansion initiatives are off to a good start, and we are on pace to achieve our 50 million annual target. As we discussed, demand remains robust, and we are adding much needed capacity in key markets to support profitable growth. The first round of expansion projects in Colombia and Canada should be online in early 2023. However, market conditions have changed. We are seeing more cost inflation and much longer lead times on key capital items due to supply chain challenges. These issues are impacting our original capital investment and magma development timelines. As a result, we are evolving our plans with agility. We expect a broader range of smaller scope capital projects rather than a few large-scale greenfield or brownfield initiatives. This will rebalance our expansion timeline as well as the risk project executions. Likewise, we are accelerating development of our Generation 3 magma solution, which is even more critical and valuable, even increasing macrovolatility and uncertainty. While our evolving plan will likely be a bit different than what we laid out last year, I'm confident we will achieve our objectives all within our original investment commitments and return profiles. Our ESG and glass advocacy efforts are also progressing well. Nearly one-third of our electricity is now being supplied from renewable sources, a big step change increased towards our goal of 40% renewables by 2030. Please see the appendix which details OI's ambitious and comprehensive set of ESG goals. Our Glass Advocacy digital campaign is gaining momentum with over 500 million digital impressions in the first quarter alone. If you joined the call a bit early, You likely heard the new song, Better in a Glass, by Chase McDaniel, a rising country music star. It's a great fun song which represents another angle of our marketing efforts, and we include more details on this slide. As part of our portfolio optimization program, we have completed or entered into sales agreements totaling $1.3 billion, and I remain highly confident we will complete this program before year end. Importantly, we remain optimistic that PADOC will resolve its asbestos legacy liabilities by mid-year. As mentioned earlier, the voting asbestos claimants have overwhelmingly approved PADOC's plans of reorganization. A hearing to consider confirmation of the plan by the bankruptcy court is currently scheduled for May 16. Upon confirmation of the plan, PADOC and the other plan proponents will seek affirmation by the Delaware District Court. Once that occurs, the plan will go effective, while Glass and Paddock will fund the trust with $610 million, and asbestos personal injury claims will be channeled to the trust. Advancing to slide six. For the past five years, building capabilities has been a top priority. We now have the agility to navigate the tremendous volatility we have seen since the start of the pandemic. As a result, we have delivered on our commitments, supported by solid, consistent execution. Over the past two years, we have leveraged long-standing relationships with suppliers and customers to find ways to overcome severe inflation, shortages in materials and logistics issues in order to meet the key stakeholder objectives. At the same time, Our improved financial performance, inventory management, and portfolio optimization are free enough capital to pay for much-needed capacity expansion. We are again acting with agility to navigate an increasingly volatile and uncertain world this year. As illustrated on the page, we are taking a rigorous and systematic approach across all facets of the business. Despite a clear step change improvement in execution, this performance has not yet translated into better valuation for OIT yet I'm confident it will. More importantly, OI is now well positioned to meet or exceed the commitments to all our stakeholders, including investors. Now I turn it over to John.