O-I Glass, Inc.

Hello everyone and welcome to the OIGlass first quarter 2024 earnings conference call. My name is Emily and I'll be facilitating your call today. After the presentation there will be the opportunity for you to ask any questions which you can do so by pressing start followed by the number one on your telephone keypad. I will now turn the call over to our host Chris Manuel, Vice President of Investor Relations to begin. Please go ahead.

Thank you, Emily. And welcome, everyone, to the OI Glass first quarter 2024 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 our financial results. Following prepared remarks, we will 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, and thanks for your interest in OI. Last night, we reported first quarter earnings of 45 cents per share. As expected, results were down from historically robust performance in the prior year period. Lower earnings primarily reflected softer demand due to the market downturn and temporary production containment to balance supply with lower shipments. While net price was down slightly, our margin expansion initiatives are off to a particularly good start this year. Although slower than originally anticipated, consumer consumption patterns are gradually improving, and we are encouraged by the progress in our shipment trends since the fourth quarter of last year. As conditions gradually improve, we are focused on the factors within our control. I'm proud of the continued excellent operating performance across the enterprise, and we have increased our full-year margin expansion initiative target as we seek to optimize our 2024 results amid slower demand. Importantly, we continue to advance Magma to create a long-term competitive advantage for the company, and we are excited for the startup of our first Magma greenfield plant in Bowling Green, Kentucky this summer. As we look to the balance of the year, We are adjusting our full year 2024 outlook to reflect a slower market recovery, which John will review a bit later. Nevertheless, we remain confident about the long-term trajectory for glass demand, as well as stronger future earnings potential as markets recover over time. Let's turn to page four to discuss current market trends. While it's still soft, the commercial environment is gradually improving. As shown on the top chart, our shipments on a year-over-year basis were down 12.5% in the first quarter compared to a 16% decline in the fourth quarter of 2023. Additionally, April shipments show gradual improvement as demand was down about 10% from prior year on a per day basis when adjusting for the shift in the Easter holiday between 2023 and 2024. Consistent with discussions in previous calls, Inventory stocking across the value chain has been a significant driver for lower shipments this past year. The stocking is in the later stages for products with a short cycle, such as beer, NABs, and food, while activity will likely continue for a couple of quarters for longer cycle products, including spirits and wine. Additionally, consumer patterns are improving, but at a slower rate than expected, as illustrated in the bottom chart. Trends improved consistently over the course of 2023, but were choppy during the first quarter this year and lacked our expectations. Software consumption is attributed to the factors we hear about in the news every day, such as cost inflation on food and various products, driving price elasticity challenges, prolonged higher interest rates, and consumer confidence that remains below pre-pandemic levels. Furthermore, we have seen a limited share shift and some trade-down, especially as our customers ramp up promotional activity, which tends to favor more value brands. As we look to the balance of the year, we expect shipments will improve as the stocking activity drops off over the next several months. However, we have revised our 2024 sales volume outlook to reflect a more gradual improvement in demand over the course of the year as we now project a slower rate of consumption recovery than originally anticipated, which is shown in the circle in the lower chart. Overall, we now expect our 2024 sales volume will be flat to up low single digits compared to our prior outlook of low to mid single-digit growth. As markets improve, we anticipate long-term glass demand will continue to benefit from key megatrends such as premiumization, health and wellness, as well as increased interest in sustainability. Overall, we expect glass demand will substantially recover to pre-pandemic levels over time. Importantly, we are well positioned to take advantage of the rebound as it unfolds. Now, I'll turn it over to John, who will review our first quarter performance and updated 2024 outlook in more detail, starting on page five.