O-I Glass, Inc.

hello and welcome to today's oi glass second quarter 2022 earnings conference call my name is elliott and i'll be coordinating your call today if you would like to register a question during a presentation you may do so by pressing star followed by one on your telephone keypad i would now like to hand over to chris manuel vice president of investor relations the floor is yours please go ahead thank you elliott and welcome everyone to oi glass second quarter 2022

earnings call. Today our discussion 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'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 disclosure of our use of non-GAAP financial measures included in those materials. 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 OIGlass. Last night, OI announced a strong second quarter adjusted earnings of 73 cents per share, which exceeded prior year results as well as guidance. Performance improved across all business layers. As expected, glass shipments increased slightly compared to the prior year, and the benefit of higher selling prices continued to more than offset cost inflation. Likewise, solid operations, cost performance, and our margin expansion initiatives contributed to this strong quarter and helped offset elevated costs as we ramp up our expansion projects. As illustrated on the left, all key measures improved with adjusted EPS up about 35% from the prior year and debt down significantly. In addition to its strong performance, we continue to advance our strategy. Our balance sheet is now in the best position since prior to a substantial investment to build out the Americas network between 2015 and 2019. This includes the acquisition of OI Mexico and Nueva Fanal, as well as JV expansion in IBC and Comequa. Additionally, OI recently announced the first US magma greenfield facility at Bowling Green, Kentucky, which should start mid-2024. Last, but certainly not least, the company has achieved a fair and final resolution of Paddock's legacy as best of liabilities and fully funded the Paddock Trust as of July 18. Hawaii has passed an inflection point and we are developing a track record of consistently delivering on our commitments. I'm proud of the team's agility and strong execution amid the backdrop of unprecedented macro volatility. In a little while, I'll review our revised capital expansion and magma development plan, which has been adapted to better fit the current macro challenges while achieving our investor day goals. Finally, John will review our recent business performance, strengthening capital structure, and improved outlook for 2022 and discuss how I, is well positioned to navigate the potential Russian natural gas containment in Europe. Let's move to page four as we review recent sales volume trends. Our shipments increased nearly 1% in the second quarter, which comes on top of an 18% improvement in the prior year quarter. Volume was up nearly 1% in both the Americas and Europe, with the strongest demand in the Andes, Mexico, and Southwest Europe. Year-to-date, shipments were up 3%, about 5% in Europe and 2% in the Americas. Market trends clearly favor glass, resulting in the strongest market fundamentals in over 20 years. Let me comment on a few of the longer-term secular trends. Across Latin America, a structural shift in demand is driving sustainable growth. Customers and consumers increasingly favor premium products and our customers are localizing international brands that have been successfully imported to these markets for several years. Premiumization favors one-way glass containers, while consumer affordability and sustainability considerations are prompting greater use of returnable bottles. For example, glass now holds 50% market share in the Brazil beer category as both one-way and returnable glass gain share. As illustrated at the bottom of the page, we have improved our mix in North America by consistently shifting away from beer to other growth categories. In fact, U.S. mega beer only represents today around 15.15% of our North America business and 4% globally. In Europe, a large volume of glass historically imported from Russia and Ukraine is no longer available due to the recent conflict. which drives up demand for locally produced glass. Glass has demonstrated strong performance across markets, both on-premise and off-premise, over the last few years, redefining long-held assumptions about glass resilience to channel shifts. Finally, strong demand is driving increased new product development in glass, which is up about 10% from pre-pandemic levels according to Mintel data. Clearly, There are many important drivers for continued secular demand growth. We expect our full year sales volume will be up around 1% in 2022 as healthy demand is tempered by record low inventories and capacity constraints across many markets. In fact, our volumes each quarter this year should exceed pre-pandemic levels. Improved production speed and efficiency can support modest sales volume growth for now. Long term, We have several expansion projects underway that will add much-needed capacity in 2023 and beyond. On top of strong performance, we continue to advance our transformation. Let's turn to page five. Our margins are up 130 basis points year-to-date despite unprecedented cost inflation. In April, we successfully raised selling prices for the second time this year, and OI should exceed its full-year net price objective. Likewise, our margin expansion initiatives are off to a good start, and we have already exceeded our annual target. Amid the strongest glass fundamentals in over 20 years, we have revised and adapted our expansion and magma development plans to better fit the macro challenges, further strengthen profitable growth, and achieve our financial targets. I'll expand more on the next page. 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 towards our goal of 40% renewables by 2030. Our glass advocacy digital marketing campaign remains in high gear, generating over 650 million digital impressions year-to-date, which supports our growing commercial pipeline. Our current portfolio optimization program should be completed by year-end, ahead of schedule. We achieved a fair and final resolution on legacy investors liabilities by mid-2022, as expected. Overall, we are making excellent progress on our key strategic objectives. Advancing to slide six. Last fall, we introduced our capital expansion plan to enable profitable growth over the next three years and our corresponding magma development plan. Since then, unprecedented macro challenges have impacted these original plans. We are experiencing delays of six to 12 months as we contend with significant supply chain lacks, cost inflation, labor availability issues, as well as COVID-related disruptions. As a result, our original plan no longer meets commercial requirements. OI is responding to these macro challenges with agility. Today, we are introducing our revised capital expansion and magma development plan, which we believe better meets today's business environment. Importantly, the revised expansion plan enables our 5-6% organic volume growth target and sustains the 20% return on investment goal across our portfolio with lower total capex. We are planning on a wider range of smaller-scale projects that reduce construction costs and complexity, broaden our market reach, and fit the timeline required to meet customers' expectations. In particular, Sky-high steel and cement prices and supply chain lags are hampering larger-scale greenfield expansion, whether with legacy or early magma generation technology. So we have reduced the number of greenfield projects in favor of line extensions, adding lines to existing furnaces, reactivating idle furnaces, and other similar efforts. The map shows the various projects included in our revised capital plan. There are no changes to the new capacity coming online in 2023. Likewise, initial magma expansion plans will be focused in the U.S. to support the attractive spirits and IPS distribution business, starting with the recently announced magma facility in Bowling Green, Kentucky. Magma development is proceeding well, yet progress is slower than originally anticipated due to the same macro challenges. So we are focusing our R&D and engineering resources on two magma greenfield lines in the U.S. rather than a larger number of sites based on early generation magma technology. This will help accelerate development of our Generation 3 solution, which includes the full suite of magma capabilities that are best positioned to address key market opportunities. We expect to complete development of our Generation 2 solution by mid-next year, which will be the basis of our new Bowling Green facility. Generation 3 development should be completed in mid-2024 with the first site to follow in 2025. In summary, the revised plan meets today's business environment and supports our investor-day financial and growth targets. Now, I'll turn it over to John to review financial matters, starting on page 7. Thanks, Andres, and good morning, everyone.