O-I Glass, Inc.

Thank you for standing by. My name is Kate and I will be your conference operator today. At this time, I would like to welcome everyone to the OI Glass first quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Chris Manuel. Please go ahead.

Thank you, Kate. And welcome, everyone, to the OI Glass first quarter 2026 earnings conference call. With me today are Gordon Hardy, our CEO, and John Hodrick, our CFO. After prepared remarks, we will open the line for Q&A. Our presentation materials are available on the company's website. Please review the safe harbor statements and the disclosures regarding our use of non-GAAP financial measures included in those materials. With that, I'll turn the call over to Gordon, who will begin on slide three.

Good morning, everyone, and thank you for joining us. Today, we will review our first quarter results, what we are seeing across the business, and our outlook for the year. Before I begin, I want to thank all our OI colleagues across the world for their focus execution and commitment to supporting our customers in a tough environment. The year got off to a challenging start. While the top line held steady, demand was sluggish early in the quarter before improving through March. We also experienced elevated commercial pressures in Europe and several one time external events that increased our costs. As a result, First quarter adjusted earnings of 5 cents per share came in below our original expectations. Fit to Win continues to deliver, and the disciplines are now embedded across the organization. We are seeing the benefits of a stronger cost position reflected in new business wins across key categories that should support higher volumes starting in the second half of the year. Operationally, it was a story of two hemispheres. In the Americas, earnings were stable despite several external disruptions. In Europe, results fell short of expectations amid elevated competitive pressure. Europe is also earlier in the fit to win journey than the Americas, and we expect performance to improve in the coming quarters as we execute the restructuring actions we have announced. Looking to the full year, we expect strong year-over-year improvement in the Americas. Yet we have updated our 2026 guidance to reflect a more challenging European market, compounded by elevated energy inflation and broader macro dynamics. John will walk you through the updated outlook in more detail in a few moments. Even with the near-term uncertainty, our strategy and priorities are unchanged. With continued fit-to-win execution and new business wins, We are confident we can strengthen results as the year progresses and expect to build momentum into 27 and beyond. We remain laser focused on our investor day objectives, and we believe many of today's headwinds are temporary. Let's now turn to slide four to discuss our top line performance and volume trends. As you can see, net sales have remained steady over the past several quarters, even amid ongoing volatility, and uncertainty. That said, we got off to a slow start this year with first quarter shipments down about 8% versus the prior year. This comparison was also tougher as last year likely benefited from customer pre-buys ahead of a new US tariff regime. By category, alcoholic end uses were the softest while NAB and food performed better. In fact, food is now emerging as our second largest category behind beer. Regionally, shipments declined in North America and Mexico amid ongoing customer inventory adjustments and spirits, while South America delivered mid to high single digit growth. In Europe, demand was softest in wine, particularly in the South, at an extended negotiation period, while other markets were more balanced. Importantly, Volume trends improve sequentially through the quarter, which March volumes down only 2%. Given that trend, we continue to expect full year sales volumes to be about flat with the prior year. After a slow first quarter, we anticipate shipments to be stable in the second quarter and to deliver low to mid single digit growth in the second half, supported by easier comparisons and new business wins. As we implement our new go to market approach, we are encouraged by the early progress. We've landed new business across about 15 accounts spanning all categories that should contribute 1.5% of new sales volume starting in the second half of the year. Together, these wins should help set us up for a profitable, sustainable growth in the 1% to 2% range beginning in 2027. While the quarter was challenging, the trend improved as we exited Q1. The team executed well in difficult circumstances. With steadier demand and new business wins, we believe the fundamentals position us well for a stronger second half. Turning now to slide five, fit to win remains a core driver for OI. The program continues to take costs out and optimize our footprint and value chain. Strengthening our cost position improves competitiveness and enables long-term profitable growth as demonstrated by new business wins. We are now at the halfway point towards delivering 750 million of cumulative benefits through 2027, and we remain ahead of schedule. In the first quarter, the team delivered gross fit-to-win benefits of about 50 million in line with our expectations. Net benefits were 35 million after headwinds from external disruption in the Americas and temporary transition costs as we complete the closure of three plants in Europe. Let me highlight our progress across the phases of the initiative. Phase A focused on SG&A streamlining and initial network optimization generated 32 million of net benefits in the quarter, despite transition costs in Europe. We expect the organisational actions and planned capacity

Ladies and gentlemen, this is the operator. I apologize, but there will be a slight delay in today's conference. Please hold, and the call will resume momentarily. Thank you for your patience.