O-I Glass, Inc.

hello everyone and welcome to the oi glass third quarter 2022 results conference call my name is sam and i'll be coordinating your call today if you'd like to ask a question during the presentation you may do so by pressing star followed by one on your telephone keypad i will now hand you over to your host chris manuel vice president of investor relations to begin chris please go ahead thank you sam and welcome welcome everyone to the oi glass third quarter earnings conference call

Today our discussion will be led by Andres Lopez, our CEO, and by 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 our disclosure and use of non-GAAP financial measures included in those materials. Now I'd like to turn the call over to Andres.

Good morning, everyone. I appreciate your interest in OIGlass. Last night, OI announced a strong third-quarter adjusted earnings of 63 cents per share, which exceeded prior year results as well as guidance. As illustrated on the left, all key measures improved. Segment operating profit and adjusted EPS increased nearly 10 percent, margins improved 60 basis points, and financial leverage was down more than a full turn. Earnings benefited from higher selling prices, which more than offset cost inflation. As expected, sales volume was up slightly amid record low inventories and capacity constraints in key markets. As we worked to commission much needed new capacity, we did incur some additional costs, which were mostly offset by solid operating performance and benefits from our margin expansion initiatives. In addition to a strong performance, we delivered on a number of key transformation initiatives during the third quarter. First, PADOC achieved a fair and final resolution of its legacy as best of liabilities, and the trust was funded in July. OI has reached an inflection point, and for the first time in decades, we are focusing all of our strong cash flow on efforts to increase shareholder value. Second, we also completed our $1.5 billion portfolio optimization program in August, which helped reduce debt and pre-fund our expansion investments. Finally, Our leverage rate is now in line with our 2024 investor day target, well ahead of schedule, and net debt was the lowest level since the OI Mexico acquisition. Recognizing our significant progress, both Moody's and S&P upgraded our credit rating during the quarter. We have updated our business outlook, reflecting a strong year-to-date performance and good momentum heading into the fourth quarter. As you may recall, we did raise our full-year earnings and cash flow outlook during an investor conference in September. We now expect full year earnings will be at the high end of that guidance range and cash flow should be in line with our updated outlook. Despite elevated macro uncertainty, we are encouraged by our performance and expect continued progress in 2023 and beyond. A bit later, John will discuss our business outlook as well as key themes for 2023. Let's move to page four as we review recent sales volume trends. Our shipments increased nearly 1% in the third quarter. Volume was up around 4% in Europe and down almost 2% in the Americas. In Europe, demand was strongest in the southwest and north central markets across multiple in-use categories. In the Americas, shipments were down mostly due to elevated asset maintenance and repair activity in Brazil and North America. With that said, The Andeans were up double digits, and spirits and NABs were the strongest categories across the Americas. Global achievements were up nearly 2.5% year-to-date, about 4% in Europe and 1% in the Americas. On the right, we have provided the latest Euromonitor consumption projections for the 2023 to 2025 period. As you can see, Glass is expected to grow nearly 2% to 4% across the markets that we serve and should be in line or exceed the overall packaging growth rate in those markets. Strong growth projections further support the federal megatrends we have discussed on the last several calls, leading to the strongest glass fundamentals we have seen in decades. As I mentioned earlier, we are capacity constrained across several key markets. Our expansion investment program will add much needed new capacity over the next few years. The first phase of our Canada expansion project is now in production, and more capacity will be enabled in Canada and Colombia in the first half of next year. Let's turn to page five. On top of strong recent performance, we continue to advance our transformation. Segment margins are at 100 basis points year-to-date, reflecting a strong net price realization and very good progress on our margin expansion initiative. As noted, our expansion projects are progressing well, as we capitalize on the strongest glass fundamentals in 20 years. All magma development efforts are advancing well, and we have made very good progress on key magma innovations, such as the modular batch system, which is critical for greenfield expansion. The team is excited and preparing for our first magma greenfield in Kentucky, which remains on track for mid-2024. Likewise, we are preparing our new ultra-lightweighting solution for full-scale market trials starting in the fourth quarter of this year. Our ESG and glass advocacy efforts are also progressing well. As discussed, we wrapped up our portfolio optimization program, and part of the result is legacy asbestos liability. Overall, we're making excellent progress on our key strategic objectives. I encourage all of you to take a look at our updated sustainability report, which can be found on the company's website. You can see a few highlights on page six. We are already more than halfway to our 2030 emissions reduction target and are implementing technologies such as gas oxy furnaces with heat recovery to further reduce CO2. Renewable energy now represents more than 27% of our energy source, a 14 percentage point increase from 2020, and we are well on our way toward 2030 goals. Likewise, we are expanding recycling collection sites, and our recent green bond helped fund numerous projects to expand collect uses. Magma and Ultra will also provide significant sustainability benefits in the future. Overall, we're making solid progress. Glass is already the most sustainable packaging solution, and I believe You will be hard-pressed to find many industrial companies with so many levers to improve their sustainability position. Now, I'll turn it over to John to review financial matters starting on page seven. Thanks, Andres, and good morning, everyone.