O-I Glass, Inc.

Now I'd like to turn the call over to Gordon, who will start on slide four. Thanks, Chris. Good morning, everyone. It's a privilege to be OI's new CEO. I've spent my career serving the food and beverage industries across the world, including at a few of OI's customers. Drinking from a glass bottle gives consumers a unique experience. From that perspective, no other packaging container delivers quite like glass. First, I would like to recognize and thank all those at OI who tirelessly focus on our customers and their consumers every day. It is this focus and attention to quality that makes OI a trusted partner and supplier to many of the world's leading food and beverage brands. As a member of the board of directors over the past eight years, I've seen firsthand the progress the team has made to make OI a more integrated and capable company. The team has achieved much. But in discussions over the last weeks, we know and acknowledge that we have not yet achieved the company's full potential nor consistently met the expectations of our shareholders. It is my focus to deliver consistent performance that significantly increases the value of our company. We have a solid foundation. We are determined to increase the value of OI for all stakeholders. In this morning's call, I will share my initial impressions as CEO or Horizon One focus areas, including a set of core operating principles and our initial roadmap to boost the value of the company. This includes a new program called Fit to Win to strengthen our competitiveness. Fit to Win is not just another cost-out initiative. It will fundamentally reshape our company and how we work. It will deliver absolute transparency on cost and returns, enable faster decision-making closer to the market and customers, and will boost competitiveness to fuel growth. As a result, we expect to significantly improve our medium-term performance through a set of self-help efforts that are within our control. We also anticipate this program will best position us to more effectively take advantage of any market rebound. Rupert Clayton, Shifting to the quarterly results we reported second quarter adjusted earnings of 44 cents per share as expected adjusted EPS was down from an historically high performance last year, given current challenging Marco conditions. Rupert Clayton, Lower earnings reflected a decline in net price realization moderately lower shipments levels and higher operating costs due to capacity curtailment to balance supply and demand. As we focused on elements in our control, these headwinds were partially mitigated by solid operating and cost performance. Market conditions remain sluggish but are gradually improving. While our second quarter shipments were down mid single digits from last year, this is an improvement on the double digit declines we saw over the last few quarters. Our volumes are no more consistent with underlying consumer consumption patterns as D stocking received in most categories. Importantly, we expect year over year sales volume growth starting in the second half of the year. As we look to the balance of 2024, we are adjusting our full year outlook as we take rapid action to ensure we are well positioned for a strong 2025. Over the medium term, we expect stronger future earnings as we execute our fit to win program to improve our competitiveness. This will position us more effectively as markets gradually recover over time. Moving to page five, I would now like to share my initial insights and share how I intend to lead the company as we move to drive better and more consistent results. Since joining the company in May, I've traveled widely and met with many key stakeholders across the value chain. I've spoken to over 1000 OI colleagues around the world from the shop floor to the leadership team to better understand how we can make OI more competitive. I've been impressed by the knowledge, skills and resilience of the OI team across the company, as well as by their willingness to face reality and offer concrete ideas for improvement. I've engaged with many customers to discuss opportunities they see in their businesses and to understand their pain points. I've also spoken with suppliers to see how we can improve together to make the value chain more efficient and make Hawaii more productive and more sustainable. I have visited retail stores and on-premise outlets and met with many contacts in the food and beverage industries. From these interactions, I have a much deeper understanding of stakeholders and market dynamics. I also gained critical insights into how to make our company safer, fitter, more sustainable, and more valuable. It is said that performance equals potential minus interference. And I've used this concept to help frame our path forward. Hawaii has significant potential. We have a great team. We have a privileged footprint. We have longstanding relationships with a diverse customer base. Customers view OI as a trusted supplier with high quality products and deep knowledge of their business and their markets. They also appreciate that Glass is a highly sustainable packaging solution that is all natural, healthy, and a great fit for a more sustainable world. However, it is clear that we have not achieved our full potential. As illustrated on the right, We have outlined the three key pillars of our fit to win program to address the interference that is holding us back and represents the first horizon of our long term strategy. Our first pillar focuses on enhancing our competitiveness. We intend to sharpen the focus of the business model and organization. We plan to decentralize more decision making and accountability to our operations across the markets we serve. making decisions closer to the customer and the market. We believe this will drive greater accountability for profit, capital allocation and cash generation. We also expect this will allow for the simplification of our corporate organization. At the same time, we plan to conduct an end-to-end supply chain review with the objective of streamlining our total value chain and driving efficiencies through productivity. This productivity will be used to boost earnings and fuel growth. For example, we targeted and completed a total organization effectiveness assessment at two of our highest performing plants in one geography and see a path to achieve between 10 and 15% efficiency gains. We therefore believe the opportunity across our network is significant. and expect it should yield meaningful network optimization benefits and higher returns. We also expect this program will increase our focus on a more profitable mix of segments, products, and customers. Importantly, we will leverage our operational capabilities built over the past several years to accelerate execution of our fit to win program. Our second pillar revolves around significantly enhancing our capital discipline and cash generation by leveraging an economic profit mindset. With this approach, the company will be responsible for improving earnings as well as optimizing the invested capital in the business as we seek to earn a target return above the cost of capital. We will direct resources and capital where we can achieve an attractive return with a clear framework to prioritize and drive value creating investment decisions. Since starting, I've read through the list of every capital project we've undertaken in 2023 and in the plan for 2024. It is clear to me that we can drive greater focus and capital discipline and drive better outcomes for the business. Our third pillar stresses the improving our financial performance and consistently achieving our commitments through a relentless focus on execution. Importantly, We intend to use economic profit as a key financial measure going forward, and we are evaluating how we will incorporate it into our incentive structure at all levels of the organization. In addition to our fit to win program, we have developed a set of operating principles. These principles will focus our actions to maximize the value of the company and are shown at the bottom of the slide. Namely, making safety our number one priority, using economic profit to drive value creation, driving productivity, continuous improvement and sustainability, building shared value with customers, strengthening leadership throughout the business, and operating with transparency, teamwork, and integrity. Let's now turn to page six and discuss our long-term roadmap for value creation. We aim to increase our profit capture over three horizons. Patrick Corbett- During horizon one we will focus our fit to win program that I just outlined to drive a deep change in the competitive position of the company. Patrick Corbett- I see significant earnings improvement that is within our control and not dependent on the level or timing of a market recovery. Patrick Corbett- It is my view that we do not require large near term volume improvement to meaningfully boost the earnings power of the business. We have sufficient self-help opportunities over the next 18 months to drive greater profitability and returns to set the business up properly for a fuller market recovery in 2026 and 2027. We anticipate the productivity improvement from Horizon 1 will deliver greater efficiency, margins, and cash generation. We plan to accelerate the realignment of our commercial portfolio between global, regional, and local customers, and prioritize premium end segments in each category. We are currently under-indexed in premium, especially in spirits. Our operating units already have a line of sight to those opportunities and a solid pipeline for new products, such as our lightweight bottles enabled by Ultra. We expect this will enable an acceleration of economically profitable growth in Horizon 2 with a laser focus on each of the segments and channels across each market we serve. During Horizon 2, we intend to align our CapEx with strategic customers' long-term plans, particularly in large and developing markets. We have a number of working examples of such customer arrangements, but we believe there is much greater opportunity. Finally, in horizon three, we expect that we will have strategic optionality. This may include geographic expansion into new growth markets with large profit pools, which could be a great fit for magma at the right economic profit. While it is early days, we have established three initial three-year targets, which span both horizon one and horizon two. By 2027, we expect to generate sustainable adjusted EBITDA of at least $1.45 billion with EBITDA margins of 20% or higher, free cash flow of at least 5% of sales, and economic profit that is at least 2% above our cost of capital. Additionally, we are announcing several near-term actions as part of our Fit to Win program, which we believe will position a Y for a step change improvement in performance starting in 2025. One, we expect to accelerate temporary production curtailments in the third quarter to rapidly reduce elevated inventory levels and improve free cash flow. Two, we expect to close at least six furnaces representing about 4% of our capacity over the next three quarters to eliminate redundant capacity as a first step of network. optimization. Three, we expect to reduce SG&A costs significantly as we streamline the organization. We will present a more detailed roadmap at our next investor day on March 14th, 2025 in New York City. A few thoughts on magma. I'm now on page seven. Magma's core technology works. The generation one smelter development is complete. And we are ramping up production of our Gen 2 greenfield in Bowling Green, which was designed to test all of Magma's current operating technologies. This greenfield is on track for commissioning in August and ramping production in the third quarter. Magma's increased flexibility has the potential to rewrite our business model, but it must deliver a meaningful economic profit within a reasonable timeframe. This is the new challenge I've set for the magma and commercial teams. As we improve the efficiency of our plants and optimize our network, we will shift our focus and resources to installing magma Gen 1 melters in certain legacy furnaces as they are replaced at end of life. In addition to leveraging our R&D investments, retrofitting certain plants with magma melters will add additional flexibility and other benefits to our network. Naturally, we will continue optimizing our Gen 2 site in Bowling Green. Additionally, we will leverage this technology into our core business and work with strategic customers to use Magma to develop more cost-effective supply chains, particularly in logistically difficult markets. Now I will turn it over to John, who will review market trends, second quarter performance, and our updated 2024 outlook in more detail.

Thanks, Gordon. Good morning, everyone. I'm starting on slide eight. The commercial environment remains soft, yet conditions are gradually recovering. Our year-over-year shipment trends improve sequentially between the first and second quarters, and we expect sales volume growth over the balance of the year. As shown on the left, our second quarter shipments were down 4.5% from the prior year compared to the 12.5% decline in the first quarter. Shipments in Europe were flat as both beer and wine returned to modest growth, while spirits remained a bit soft. In the Americas, volume was down 8.5% in the quarter given lower beer, wine, and spirit shipments in North America and Mexico, yet volume was up double digits in the Andean market following recent expansion projects. We have provided more details on our second quarter sales volume trends by category on the right. Except for spirits, our shipment levels are now generally consistent with underlying consumer consumption patterns, which remain soft. Destocking has receded across most categories, except spirits, which we expect will continue through the end of the year. I do believe we have turned the corner. Our shipments were up more than 5% in July, and we anticipate mid-single-digit growth in the second half of the year, supported by easier prior-year comparisons and slowly improving consumer consumption. Overall, we expect glass demand will gradually recover over time, and we are well positioned to take advantage of the rebound as it unfolds. Let's discuss our recent financial performance on page nine. OI reported second quarter adjusted earnings of 44 cents per share. As expected, results were down from historically high adjusted earnings of 88 cents per share last year, given challenging macro conditions. As illustrated, adjusted earnings primarily reflected the decline in segment operating profit, while non-operating items and FX were generally stable. Additional details are included on the slide. Let's turn to page 10 and discuss performance across our two segments. The Americas posted segment operating profit of $106 million, which was down from $126 million last year. Matt Perault, net price was flat while shipments were down eight and a half percent as discussed, despite elevated temporary production curtailments operating costs were up just slightly given favorable margin expansion initiative benefits. Matt Perault, And Europe segment operating profit total $127 million down from 200 million last year as anticipated net price was a headwind in Europe, while sales volume was flat. As you can see, operating costs were elevated, mostly due to higher temporary production curtailments to balance supply with demand, software demand noted over the past few quarters. Let's move to page 11 and discuss our updated 2024 business outlook. We have revised our full-year guidance to reflect software demand as well as rapid inventory control measures that should position OI for success starting in 2025. We now expect sales volume will be about flat or down slightly from prior year. and OI is accelerating temporary production curtailments to quickly align supply with lower demand. As a result, total production should be down about 7% from last year, and we expect our year-end IDS levels will be consistent with historically low inventories achieved back in 2022. Inventory control actions will be concentrated in the third quarter. While this will negatively impact near-term results, we will rapidly align supply with softer demand get our inventories at the right level, and significantly reduce the need for costly curtailments in the future, which should boost results next year. Additionally, we have adjusted our free cash flow guidance to reflect the updated business outlook, as well as an additional estimate for anticipated restructuring activities as part of our fit to win actions. This slide provides the specific details on our revised outlook. While we are adjusting our 2024 outlook, we are taking quick action to rebalance our network given current market conditions that should position OI well for 2025. As Gordon discussed, we expect our Fit to Win program will significantly improve earnings, cash flow, and economic profit over the next three years. Now I'll turn it back to Gordon, who will conclude on slide 12.

Thanks, John. Again, it's a privilege to be OI's CEO. I see significant opportunity to advance our company. We are focusing the company on a new set of priorities aimed at improving our value. Well, down from historically high performance last year, the company continued to navigate well through ongoing challenging market conditions during the second quarter. Fortunately, we achieved good sequential sales volume improvement in the second quarter and expect to return to growth over the balance of the year. While we have reduced our full year outlook, we are taking rapid action that we expect will impact near-term results, which should better position OI for success in 2025 and beyond. This is an exciting time. We are determined to grow the value of the company as we execute fit to win, drive greater capital discipline, and deliver profitable growth. I look forward to working closely with the financial community. Thank you, and we are now ready to take your questions.