Q2 2024 O-I Glass Inc Earnings Call

During the presentation, you will have the opportunity to ask a question by pressing star followed by 1 on your telephone keypad. If you change your mind, please press star followed by 2. I will now hand you over to your host, Chris Manuel, Vice President of Investor Relations, to begin. Chris, please go ahead.

Operator: If you change your mind, please press star followed by two.

Christopher Manuel: I will now hand you over to your host, Chris Manuel, Vice President of Investor Relations, to begin. Chris, please go ahead.

Kiki: I will now hand you over to your host, Chris Manuel, Vice President of Investor Relations, to begin. Chris, please go ahead. Thank you, Kiki. And welcome everyone to the OI Glass second quarter 2024 conference call. Our discussion today will be led by our new CEO, Gordon Hardy, and John Haudrich, our CFO.

Christopher Manuel: Thank you, Kiki, and welcome everyone to the UI Glass 2nd quarter 2024 conference call. Our discussion today will be led by our audience view on the business as he joins Owens-I, key business developments, and review our financial result.

Christopher David Manuel: Today we will discuss Gordon's view of the business as he joins OI, key business developments, and review our financial results. Following prepared remarks, we will host a Q&A session. Presentation materials for this earnings 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 Gordon, who will start on slide four.

Christopher David Manuel: Thank you, Kiki, and welcome everyone to the OI Glass second quarter 2024 conference call.

Speaker Change: Our discussion today will be led by our new CEO .

Speaker Change: Gordon Hardy, and John Haudrich our CFO . Today we will discuss Gordon's view on the business as he joins OI, key business developments, and review our financial results. Following prepared remarks we will host a Q&A session.

Christopher Manuel: Following prepared remarks, we will host a Q&A session.

Christopher Manuel: Presentation materials for this earnings 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.

Speaker Change: Presentation materials for this earnings 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 Gordon who will start on slide 4.

Gordon Hardie: Now I'd like to turn the call over to Gordon, who will start on slide 4. Thanks, Chris. Good morning, everyone.

Gordon Hardy: 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.

Gordon Hardie: It's a privilege to be O.I.'s new CEO. I've spent my career serving the food and beverage industries across the world, including out a few of O.I.'s customers. Drinking from a glass bottle gives consumers a unique experience. From that perspective, no other packaging container delivers quite like draft.

Gordon Hardy: Thanks, Chris. Good morning, everyone. It's a privilege to be OI's new CEO .

Gordon Hardy: I've spent my career serving the food and beverage industries across the world, including at a few of OI's customers.

Speaker Change: Drinking from a glass bottle gives consumers a unique experience. From that perspective, no other packaging container delivers quite like glass.

Gordon Hardy: 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.

Gordon Hardie: First, I would like to recognize and thank all those at O.I. who tirelessly focus on our customers and their consumers every day. It is this focus and attention to quality that makes O.I. 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 first-hand the progress the team has made to make O.I. more integrated and capable company. The team has achieved much.

Speaker Change: 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.

Speaker Change: As a member of the Board of Directors over the past eight years, I've seen first-hand the progress the team has made to make OI a more integrated and capable company.

Gordon Hardy: 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.

Gordon Hardie: 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 O.I. for all stakeholders.

Speaker Change: 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.

Speaker Change: It is my focus to deliver consistent performance that significantly increases the value of our company.

Gordon Hardy: 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 of 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 Fit2Win to strengthen our competitiveness.

Speaker Change: We have a solid foundation. We are determined to increase the value of OI for all stakeholders.

Gordon Hardie: In this morning's call, I will share my initial impressions as CEO of 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.

Speaker Change: In this morning's call, I will share my initial impressions as CEO of Horizon One Focus Areas, including a set of core operating principles and our initial roadmap to boost the value of the company.

Gordon Hardy: Fit2Win 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 that this program will best position us to more effectively take advantage of any market rebounds.

Speaker Change: This includes a new program called Fit2Win to strengthen our competitiveness.

Speaker Change: Fit2Win is not just another cost-out initiative. It will fundamentally reshape our company and how we work.

Speaker Change: 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.

Speaker Change: As a result, we expect to significantly improve our medium-term performance through a set of self-help efforts that are within our control.

Gordon Hardie: We also anticipate this program will best position us to more effectively take advantage of any market rebound.

Speaker Change: We also anticipate this program will best position us to more effectively take advantage of any market rebound.

Gordon Hardie: Shifting to the quarterly results, we reported its second quarter adjusted earnings of $0.44 per share. As expected, adjusted EPS was down from an historically high performance last year, giving current, challenging, law earnings reflected as client in net price realization, moderately lower shipments levels, and higher operating costs due to capacity curtailments to balance supply in demand. As we focused on elements in our control, these headwinds were partially mitigated by solid operating and cost performance. Market conditions remained 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.

Gordon Hardy: Shifting to the quarterly results, we reported second quarter adjusted earnings of 44 cents per share. As expected, adjusted EPS was down from a historically high performance last year, given the current challenging macro conditions. Lower earnings reflected a decline in net price realization, moderately lower shipment levels, and higher operating costs due to capacity curtailments to balance supply and demand.

Speaker Change: 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 macro conditions.

Speaker Change: Lower earnings reflected a decline in net price realization, moderately lower shipments levels, and higher operating costs due to capacity curtailments to balance supply and demand.

Gordon Hardy: 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 now more consistent with underlying consumer consumption patterns, as de-stocking is received in most

Speaker Change: As we focused on element inner control, these headwinds were partially mitigated by solid operating and cost performance.

Speaker Change: Market conditions remain sluggish but are gradually improving.

Speaker Change: 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.

Gordon Hardie: Our volumes are no more consistent with underlying consumer consumption patterns as destalking receives in most categories.

Speaker Change: Our volumes are now more consistent with underlying consumer consumption patterns as de-stocking received in most categories.

Gordon Hardy: 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 Fit2Win program to improve our competitiveness, which will position us more effectively as markets gradually recover over time.

Gordon Hardie: 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.

Speaker Change: Importantly we expect year-over-year sales volume growth starting in the second half of the year.

Speaker Change: 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.

Speaker Change: Over the medium term, we expect stronger future earnings as we execute our Fit2Win program to improve our competitiveness.

Speaker Change: This will position us more effectively as markets gradually recover over time.

Gordon Hardie: Moving to page 5, I would now like to share my initial insights and share how I intend to leave the company as we move to drive better and more consistent results. Since joining the company in May, I have traveled widely and met with many key stakeholders across the value chain. I have spoken to over a thousand O.I. colleagues around the world from the shop floor to the leadership team to better understand how we can make OI more competitive. I have been impressed by the knowledge, skills, and resilience of the OIT and across the company, as well as by their willingness to face reality and offer concrete ideas for improvement.

Gordon Hardy: 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.

Speaker Change: Moving to page 5, 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.

Speaker Change: 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 a thousand OI colleagues around the world, from the shop floor to the leadership team, to better understand how we can make OI more competitive.

Gordon Hardy: I've spoken to over a thousand 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.

Speaker Change: 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.

Gordon Hardie: I have engaged with many customers to discuss opportunities they see in their businesses and to understand their pain points. I have also spoken with suppliers to see how we can improve together to make the value chain more efficient and make OI 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.

Speaker Change: I've engaged with many customers to discuss opportunities they see in their businesses and to understand their pain points.

Gordon Hardy: 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 industry. Hawaii has significant potential. We have a great team.

Speaker Change: 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.

Speaker Change: I have visited retail stores and on-premise outlets and met with many contacts in the food and beverage industries.

Gordon Hardie: 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.

Speaker Change: 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.

Gordon Hardie: It is said that performance equals potential minus interference, and I have used this concept to help frame our path forward. OI has significant potential. We have a great team. We have a privileged footprint. We have long-standing relationships with a diverse customer base. Customers' U.O.I. is 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.

Speaker Change: It is said that performance equals potential minus interference, and I've used this concept to help frame our path forward.

Gordon Hardy: We have a privileged footprint. We have longstanding relationships with a diverse customer base. Customer's View OI is a trusted supplier with high-quality products and deep knowledge of their business and their market. We believe this will drive greater accountability for profit, capital allocation, and cash generation. We 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 percent efficiency gains.

Speaker Change: Hawaii has significant potential. We have a great team, we have a privileged footprint, we have long-standing relationships with a diverse customer base.

Speaker Change: Customers view OI as a trusted supplier with high quality products and deep knowledge of their business and their markets.

Speaker Change: 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.

Gordon Hardie: However, it is clear that we have not achieved our full, 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 would drive greater accountability for profit, capital allocation, and cash generation.

Speaker Change: However, it is clear that we have not achieved our full potential.

Speaker Change: As illustrated on the right, we have outlined the three key pillars of our Fit2Win program to address the interference that is holding us back and represents the first horizon of our long-term strategy.

Speaker Change: Our fourth pillar focuses on enhancing our competitiveness.

Speaker Change: 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.

Speaker Change: We believe this will drive greater accountability for profit, capital allocation, and cash generation.

Gordon Hardie: 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 product activity. 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.

Speaker Change: We also expect this will allow for the simplification of our corporate organization.

Speaker Change: 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.

Speaker Change: For example, we targeted...

Speaker Change: 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 percent efficiency gains.

Speaker Change: We therefore believe the opportunity across our network is significant and expect it should yield meaningful network optimization benefits and higher returns.

Gordon Hardie: 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.

Speaker Change: We also expect this program will increase our focus on a more profitable mix of segments, products, and customers.

Speaker Change: Importantly, we will leverage our operational capabilities built over the past several years to accelerate execution of our Fit2Win program.

Gordon Hardie: 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 in 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 have 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.

Speaker Change: Our second pillar revolves around significantly enhancing our capital discipline and cash generation by leveraging an economic profit mindset.

Speaker Change: With this approach, the company will be responsible for improving earnings as well as optimising the invested capital in the business as we seek to earn a target return above the cost of capital.

Speaker Change: 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.

Gordon Hardy: Since starting, I've read through the list of every capital project we have 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. In addition to our Fit2Win program, we have developed a set of operating principles, 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.

Speaker Change: Since starting I've read through the list of every capital project we have 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.

Gordon Hardie: 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.

Speaker Change: Our third pillar stresses the improving our financial performance.

Speaker Change: and consistently achieving our commitments through a relentless focus on execution.

Speaker Change: 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.

Gordon Hardie: 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.

Speaker Change: In addition to our Fit2Win program, we have developed a set of operating principles.

Speaker Change: 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,

Speaker Change: driving productivity, continuous improvement, and sustainability, building shared value with customers, strengthening leadership throughout the business, and operating with transparency, teamwork, and integrity.

Gordon Hardy: Let's now turn to page 6 and discuss our long-term roadmap for value creation. We aim to increase our profit capture across three horizons. During Horizon One, we will focus our Fit2Win program that I just outlined to drive a deep change in the competitive position of the company. It is my view that we do not require a large, near-term volume improvement to meaningfully boost the earnings power of the business. We anticipate the productivity improvement from Horizon 1 will deliver greater efficiency, margins, and cash generation. Additionally, we plan to accelerate the realignment of our commercial portfolio between global, regional, and local customers and prioritise premium end segments in each category. We are currently under-indexed in the premium category, especially in spirits.

Gordon Hardie: 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. 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. I see significant earnings improvement that is within our control and not dependent on the level or timing of a market of recovery. 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.

Speaker Change: Let's now turn to page 6 and discuss our long-term roadmap for value creation.

Speaker Change: We aim to increase our profit capture over three horizons.

Speaker Change: 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.

Speaker Change: I see significant earnings improvement that is within our control and not dependent on the level or timing of a market recovery.

Speaker Change: It is my view that we do not require large, near-term volume improvement to meaningfully boost the earnings power of the business.

Speaker Change: 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.

Gordon Hardie: We anticipate the productivity improvement from horizon one 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 two, with a laser focus on each of the segments and channels across each market we serve.

Speaker Change: We anticipate the productivity improvement from Horizon One will deliver greater efficiency, margins, and cash generation.

Speaker Change: 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.

Speaker Change: 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.

Gordon Hardy: 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. Initial three-year targets, which span both Horizon 1 and Horizon 2. By 2027, we expect to generate sustainable adjusted EBITDA of at least $1.45 billion with EBITDA margins of 20% or higher. MAGMA's core technology works.

Speaker Change: 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.

Gordon Hardie: During horizon two, 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.

Speaker Change: During Horizon 2, we intend to align our CAPEX with strategic customers' long-term plans, particularly in large and developing markets.

Speaker Change: We have a number of working examples of such customer arrangements, but we believe there is much greater opportunity.

Gordon Hardie: 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.

Speaker Change: Finally, in Horizon 3 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.

Gordon Hardie: 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 roll of at least 5% of sales, and an economic profit that is at least 2% above our cost to capital. Additionally, we are part of our fit-to-win program, which we believe will position a Y for a step change improvement in performance starting in 2025.

Speaker Change: While it is early days, we have established three initial three-year targets which span both Horizon 1 and Horizon 2.

Speaker Change: By 2027, we expect to generate sustainable adjusted EBITDA of at least $1.45 billion with EBITDA margins of 20% or higher.

Speaker Change: Free cash flow of at least 5% of sales and economic profit that is at least 2% above our cost of capital.

Speaker Change: Additionally, we are announcing several near-term actions as part of our Fit2Win program, which we believe will position Hawaii for a step change improvement in performance starting in 2025.

Gordon Hardie: One, we expect to accelerate temporary production contaminants in the tar quarter to rapidly reduce elevated inventory levels and improve free cash roll. 2. 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. 3. We expect to reduce S-GNA costs significantly as we streamline the organization.

Speaker Change: One, we expect to accelerate temporary production curtailments in the third quarter to rapidly reduce elevated inventory levels and improve free cash flow.

Speaker Change: 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.

Speaker Change: Three, we expect to reduce SG&A costs significantly as we streamline the organization.

Gordon Hardie: We will present a more detailed roadmap at our next Investor Day on March 14, 2025, in New York City.

Speaker Change: We will present a more detailed roadmap at our next Investor Day on March 14, 2025 in New York City.

Gordon Hardie: A few thoughts on Magma. I'm now on page seven. Magma's core technology works. The generation won smelter development is complete, and we are ramping up production of our 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 have 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 the end of life.

Speaker Change: A few thoughts on magma. I'm now on page 7.

Speaker Change: Magma's core technology works.

Speaker Change: The Generation 1 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.

Gordon Hardy: This greenfield is on track for commissioning in August and ramping up production in the third quarter. 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. And naturally, we will continue optimizing our Gen 2 site in Bowling Green.

Speaker Change: This greenfield is on track for commissioning in August and ramping production in the third quarter.

Speaker Change: MAGMA's increased flexibility has the potential to rewrite our business model but it must deliver a meaningful economic profit within a reasonable time frame. This is the new challenge I've set for the MAGMA and commercial teams.

Speaker Change: 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.

Gordon Hardie: In addition to leveraging or in the 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.

Speaker Change: In addition to leveraging our R&D investments, retrofitting certain plants with magma melters will add additional flexibility and other benefits to our network.

Speaker Change: Naturally, we will continue optimizing our Gen 2 site in Bowling Green.

Gordon Hardy: 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. Shipments in Europe were flat as both beer and wine returned to modest growth while spirits remained a bit soft.

Speaker Change: Additionally, we will leverage this technology into our core business and work with strategic customers to use magma

Speaker Change: to develop more cost-effective supply chains, particularly in logistically difficult markets.

John Haudrich: Now I will turn over to John, who will review market trends, second quarter performance, and our updated 2024 outlook in more detail. Thanks, Gordon.

Speaker Change: Now I will turn it over to John who will review market trends, second quarter performance and our updated 2024 outlook in more detail.

John Haudrich: Good morning, everyone.

John Haudrich: I am starting on slide 8. 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 by and 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 shipment in North America and Mexico; yet volume was up double digits in the Indian market following recent expansion projects.

John A. Haudrich: Thanks, Gordon. Good morning, everyone. I'm starting on slide 8. 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.

John A. Haudrich: 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.

John A. Haudrich: Shipments in Europe were flat as both beer and wine returned to modest growth while spirits remained a bit soft.

John A. Haudrich: 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.

John Haudrich: We have provided more details on our second quarter sales volume trend 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 to cross-most categories except spirits, which we expect will continue through the end of the year.

Gordon Hardy: We have provided more details on our second quarter sales volume trends by category on the right. De-stocking has receded across most categories except spirits, which we expect will continue through the end of the year. The Americas posted a segment operating profit of $106 million, which was down from $126 million last year. Net price was flat, while shipments were down 8.5%, as discussed.

John A. Haudrich: We have provided more details on our second quarter sales volume trends by category on the right.

John A. Haudrich: Except for spirits, our shipment levels are now generally consistent with underlying consumer consumption patterns, which remain soft.

John A. Haudrich: De-stocking has receded across most categories except spirits, which we expect will continue through the end of the year.

John Haudrich: 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. Over all, we expect class demand will gradually recover over time, and we are well positioned to take advantage of the rebound as it unfolds.

John A. Haudrich: 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.

John A. Haudrich: Overall, we expect glass demand will gradually recover over time, and we are well positioned to take advantage of the rebound as it unfolds.

John Haudrich: Last discuss our recent financial performance on page 9. Oh, I reported a second quarter adjusted earnings of $0.44 per share. As expected, results were down from historically high adjusted earnings of $0.88 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 effects were generally stable. Additional details are included on the slide.

Speaker Change: Let's discuss our recent financial performance on page 9. OI reported second quarter adjusted earnings of $0.44 per share. As expected, results were down from a historically high adjusted earnings of $0.88 per share last year given challenging macro conditions.

Speaker Change: As illustrated, adjusted earnings primarily reflected the decline in segment operating profit, while non-operating items in FX were generally stable. Additional details are included on the slide.

John Haudrich: Let's turn to page 10 and discuss performance across our two segments. The America's Post's segment operating profit of $106 million, which was down from $106 million, which was down from $126 million last year. Net price was flat, while shipments were down 8.5% as discussed. Despite elevated temporary production curtailments, operating costs were up just slightly, given favorable margin expansion and initiative benefits. In Europe, segment operating profit totaled $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.

Speaker Change: Let's turn to page 10 and discuss performance across our two segments.

Speaker Change: The Americas Post's segment operating profit of $106 million, which was down from $126 million last year.

Speaker Change: 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

Gordon Hardy: Despite elevated temporary production curtailments, operating costs were up just slightly given favorable Margin Expansion Initiative benefits. Inventory control actions will be concentrated in the third quarter. While this will negatively impact near-term results, we will rapidly align supply with software 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 Act. This slide provides the specific details on the revised outline. While down from its historically high performance last year, the company continued to navigate well through ongoing challenging market conditions during the second quarter.

Speaker Change: In Europe , segment operating profit totaled $127 million down from $200 million last year.

Speaker Change: 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.

John Haudrich: 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 in IDS levels will be consistent with historically low inventory achieved back in 2022.

Speaker Change: Let's move to page 11 and discuss our updated 2024 business outlook. We have revised our full year guidance to reflect softer demand as well as rapid inventory control measures that should position OI for success starting in 2025.

Speaker Change: 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.

Speaker Change: 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.

John Haudrich: Inventory control actions will be concentrated in the third quarter. While this will negatively impact near-term results, we will rapidly align supply with software demand, get our inventory 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.

Speaker Change: Inventory control actions will be concentrated in the third quarter. While this will negatively impact near-term results, we will rapidly align supply with software 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.

Speaker Change: 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.

Speaker Change: This slide provides the specific details on a revised outlook.

Speaker Change: 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.

John Haudrich: As Gordon discussed, we expect our Fit to Win program will significantly improve earnings, cash flow, and economic profit over the next three years.

Speaker Change: As Gordon discussed, we expect our Fit2Win 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.

Gordon Hardie: Now turn it back to Gordon, who will conclude on slide 12.

Gordon Hardie: Thanks, John.

Gordon Hardie: Again, it's a privilege to be OICU. I see significant opportunity to advance our company. We are focusing the company on a new set of priorities aimed at improving our value. While 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.

Gordon Hardy: Thanks, John. Again, it's a privilege to be OICU. I see significant opportunity to advance our company. We are focusing the company on a new set of priorities aimed at improving our value.

Speaker Change: While down from historically high performance last year, the company continued to navigate well through ongoing challenging market conditions during the second quarter.

Gordon Hardy: Fortunately, we achieved good sequential sales volume improvement in the second quarter and expect to return to growth over the balance of the year. This is an exciting time. We are determined to grow the value of the company as we execute Fit2Win, 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. Please only ask one question and one follow-up. The first question... comes from Ghansham Panjabi from Baird.

Speaker Change: Fortunately, we achieved good sequential sales volume improvement in the second quarter and expect to return to growth over the balance of the year.

Gordon Hardie: 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.

Speaker Change: While we have reduced our full-year outlook, we are taking rapid action that we expect will impact near-term results but should better position OI for success in 2025 and beyond.

Speaker Change: 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.

Operator: Thank you, and we are now ready to take your questions.

Speaker Change: I look forward to working closely with the financial community. Thank you, and we are now ready to take your questions.

Operator: Thank you.

Operator: If you would like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two.

Speaker Change: Thank you. If you would like to ask a question, please press star followed by 1 on your telephone keypad now. If you change your mind, please press star followed by 2.

Operator: Please only ask one question and one follow-up. If you have any further questions, please recute a line.

Speaker Change: Please only ask one question and one follow-up.

Speaker Change: If you have any further questions, please recue the line. When preparing to ask a question, please ensure your device is unmuted locally.

Operator: One member in to ask a question, please ensure your device is immutable locally.

Ghansham Panjabi: The first question comes from Ghansham Panjabi from Baird. The line is now opened; please go ahead. Thank you, operator.

Speaker Change: The first question...

Ghansham Panjabi: comes from Ghansham Panjabi from Baird. The line is now open, please go ahead.

Gordon Hardy: The line is now open, please go ahead. Yeah, thanks. Thanks for that question, Ghansham. Look, the company has undergone, you know, seven, seven years. I think what we're presenting here is, you know, a whole company end-to-end review across the entire business and the whole value chain, right back to, you know, suppliers. So it's more holistic.

Ghansham Panjabi: Good morning, Gordon, and everyone in Gordon. Congrats on your new role. Thanks, Ghansham. Yes, so I guess you have been on the board for nearly a decade. The companies pursue various iterations of cost-outs and optimization plans, etc.

Ghansham Panjabi: Thank you, operator. Good morning, Gordon and everyone, and Gordon, congrats on your new role.

Speaker Change: Thanks, Ghansham.

Ghansham Panjabi: Yeah, so I guess, you know, you've been on the board for nearly a decade. You know, the company's pursued various iterations of cost outs and optimization plans, etc.

Gordon Hardie: What do you think is the holistic difference between what you are outlining now versus previous programs, and how do you ensure that there won't be customer service issues as you consolidate and can tell some of these furnaces that you have outlined? Thanks for that question, Ghansham. The company has, over the last seven years, certainly improved its operational execution capability and has done some very good work on productivity in specific parts of the business. I think what we are presenting here is a whole-of-company end-to-end review across the entire business and the whole value chain, or right back to suppliers.

Speaker Change: What do you think is the holistic difference between what you're outlining now versus previous programs? And then how do you ensure that there won't be customer service issues as you consolidate and curtail some of these furnaces that you've outlined?

Gancham: Thanks for that question, Ghansham. The company has, over the last seven years,

Gancham: certainly improved its operational execution and capability and has done some very good work on productivity in specific parts of the business.

Gancham: I think what we're presenting here is, you know, a whole of company end-to-end review across the entire business and the whole value chain, right back to...

Gordon Hardie: So it's more holistic. It's going to reshape the company. It's going to reshape how we work. It's going to simplify the business, allow us to speed up, and allow us to innovate faster. We're going to get to absolute transparency on costs and returns to make better value-creating decisions. And it will boost competitiveness to fuel growth. So I think the main difference between what the team has achieved before and what we're now focused on is really an end-to-end review of the business. And once and for all, kind of address areas of what I would call interference in creating more value in the company.

Gancham: to suppliers. So it's more holistic, it's going to reshape the company, it's going to reshape how we work, it's going to simplify the business, allow us to speed up and allow us to innovate faster.

Gordon Hardy: It's going to reshape the company, it's going to reshape how we work. It's going to simplify the business, allow us to speed up, and allow us to innovate faster. We're going to get to absolute transparency on costs and returns to make better value-creating decisions. If all you do is kind of change costs and let the customer down, that's not an outcome. We have a very good integrated business planning system in the business, which is both medium-term but also great S&OP processes, and we will make sure that we have enough inventory in the system to guarantee our customers that we will not let them down. You know, our job is to make sure that our customers' plants are running on time, as they should, with no interruptions from us.

Gancham: We're going to get to absolute transparency on costs and returns to make better value-creating decisions.

Gancham: and it will boost competitiveness to fuel growth.

Gancham: So, I think the main difference between what the team has achieved before and what we're now focused on is really an end-to-end review of the business. And once and for all, kind of address areas of what I would call interference in creating more value in the company.

Gordon Hardie: In terms of customer service, if all you do is kind of change costs and let the customer down, that's not an outcome. We have a very good integrated business planning system in the business, which is both media term but also grace SNOP processes. And we will make sure that we have enough inventory in the system to guarantee our customers that we will not let them down. Our job is to make sure that our customers' plans are running on time as they should, with no interruptions from us. And we have a very experienced team now across the many markets.

Gancham: In terms of customer service,

Gancham: If all you do is kind of change costs and let the customer down, that's not an outcome. We have a very good integrated business planning system in the business, which is both medium term, but also great SNOP processes.

Gancham: And we will make sure that we have enough inventory in the system to guarantee our customers that we will not let them down.

Gancham: You know, our job is to make sure that our customers' plants are running on time, as they should, with no interruptions from us.

Gordon Hardy: And we have a very experienced team now, you know, across many markets. And, you know, from my own experience, where I ran daily fresh businesses in a 99.5% die-fast world, I'm well-versed and very conscious about changing supply chains and not letting people down. So it's a point well taken.

Speaker Change: And we have a very experienced team now, you know, across the many markets. And, you know, from my own experience, where...

Gordon Hardie: And from my own experience, where I run daily fresh businesses at 99.5% die fast world, I'm well versed and very conscious about changing supply chains and not letting people down. So it's a point well taken, but I think we're a process and we will deliver the changes without letting the customer down.

Speaker Change: You know, I run daily fresh businesses at 99.5% DIFOS world. You know, I'm well-versed and very conscious.

Speaker Change: about, you know...

Speaker Change: Changing

Speaker Change: Supply Chains and not letting people down. So it's a point well taken, but I think we're across it and we'll deliver the changes without letting the customer down.

Gordon Hardy: But I think we're across this, and we'll deliver the changes without letting the customer down. Is that just an acknowledgment that maybe this should have been done earlier, and you're trying to sort of clear the system as the company cycles into 2025? And on that, you know, do you think that process will end by the end of this year just based on the fact that volumes are starting to perk up a little? You know, free up that cash.

Ghansham Panjabi: Okay, thanks for that. And then your decision to accelerate, you know, focus on cash for basically realign inventory specific to 3Q.

Speaker Change: Thanks for that. And then your decision to accelerate, you know, focus on cash flow, basically realign inventory specific to 3Q.

Gordon Hardie: Is that just an acknowledgement of maybe this should have been done earlier, and you're trying to sort of clear this system as a company cycles into 2025? And on that, you know, do you think that process will end by the end of this year, just based on the fact that volumes are starting to work up a little bit relative to the baseline?

Speaker Change: Is that just an acknowledgment of maybe this should have been done earlier and you're trying to sort of clear the system as the company cycles into 2025?

Speaker Change: And on that, you know, do you think that process will end by the end of this year, just based on the fact that volumes are starting to perk up a little bit relative to the baseline?

Gordon Hardie: Yeah, let me take the second part for us here. You know, as our volume and consumer pull through a line, you know, we would expect a natural decline in inventory levels. But the level of injury we have, you know, at Arun 1.2 billion, you know, that's just trap cash. And the way, you know, this industry works is, you know, your furnaces flow, you know, 24/7, 365. You don't have much flexibility in terms of operating week to week, month to month. So we've taken the decision to, you know, unleash or, you know, free that cash. And as we go forward, that is something we're going to be focused on is the working capital in the business.

Speaker Change: Yeah, let me let me take the second part first. Yeah, you know, as our volume and consumer pull through a line, you know, we would expect a natural decline in inventory levels.

Speaker Change: But the level of injury we have, you know, it's around 1.2 billion, you know, that's just trap cash. And the way, you know, this industry works is, you know, your furnaces.

Speaker Change: Flow 24x7, 365. You don't have much flexibility in terms of operating week to week, month to month. So we've taken the decision to unleash our...

Gordon Hardy: And as we go forward, that is something we're going to be focused on the working capital in the business. And that needs to become the benchmark so that we generate as much cash as possible from our operations. Ghansham, I would add to that if you take a look at our temporary curtailment activities this year, it'll probably be about 15% of our total capacity will be curtailed this year. That's up from 8% last year, so 7% incremental.

Speaker Change: You know, free that cash. And as we go forward, that is something we're going to be focused on, is the working capital in the business.

John Haudrich: We're currently running at about 60 days, but we have pockets of our business and operating units that are, you know, operating well below a 30. And that needs to become the benchmark. And so that, you know, we generate as much cash as possible from our operations.

Speaker Change: We're currently running at about 60 days but we have pockets of our business and operating units that are you know operating well below 30 and and that needs to become the benchmark and so that you know we we generate as much as much cash as possible from from our operations.

John A. Haudrich: So this year we are absorbing about $180 million of additional costs to rebalance the network and get inventories down to, call it, the mid to low 40s of IDS. So as we look forward, you know, managing to those low, low inventory levels and, ideally, lower as Gordon is, we're going to be positioned for that going into next year. And as we think about next year, we get out from underneath, you know, all that extra incremental cost that I was referring to there. So it should significantly boost our performance next year. Hi everyone. Good morning.

John Haudrich: Yeah, Gancham, I would add to that. If you take a look at our temporary curtailment activities this year, it'll probably be about 15% of our total capacity that will be curtailed this year. That's up from 8% last year, so 7% incremental. So this year, we are absorbing about $180 million of additional costs to rebalance the network and get inventories down to, call it in the mid to low 40s of IDS. So as we look forward, you know, managing to that low, low inventory levels and ideally lower is, as Gornars, we're going to be positioned for that going in the next year.

Ganshim: Ghansham, I would add to that, if you take a look at our temporary curtailment activities this year, it'll probably be about 15% of our total capacity will be curtailed this year.

Ghansham Panjabi: That's up from 8% last year, so 7% incremental. So this year we are absorbing about $180 million of additional cost to rebalance the network and get inventories down to, call it in the mid to low 40s of IDS.

Speaker Change: So, as we look forward, you know, managing to that low, low inventory levels, and ideally lower as Gordon is, we're going to be positioned for that going into next year. And as we think about next year, we get out from underneath, you know, all that extra incremental cost that I was referring to there, so it should significantly boost our performance next year.

John Haudrich: And as we think about next year, we get out from underneath, you know, all that extra incremental costs that I was referring to there. So it should significantly boost our performance next year.

Ghansham Panjabi: Okay.

Ghansham Panjabi: Thanks for those numbers. Thank you.

Speaker Change: Okay, thanks for those numbers.

Josh Stuffles: The next question is from Josh Stuffles from Bank of America. The line is now open. Please go ahead.

Speaker Change: Thank you.

Speaker Change: The next question is from Josh Staphos from Bank of America. The line is now open. Please go ahead.

Josh Stuffles: Hi, everyone. Good morning. Gordon, best of luck to you in the role. And thank you for taking my question. You know, I'm going to take a similar tack. You know, I've covered Owen's Illinois since 1992. And I've seen good years, bad years, but I've seen many restructuring and optimization and redirection programs for OI over the years. And one of the things that winds up being the interference, as you put it, Gordon, is the inherent fixed cost of the business. In many ways, it lends itself to a command and control style because you just, you have to run or else you're going to get eaten alive by the fixed cost.

Operator: Gordon, best of luck to you in your new role. And thanks for taking my question. Um, restructuring and optimization and redirection programs for OI over the years, um... of the business, it in many ways lends itself to a command and control style because you just have to run or else you're gonna get eaten alive by the fixed costs. Sure, thanks for that, Josh, and I look forward to meeting you at some stage.

Josh Staphos: Hi everyone, good morning. Gordon, best of luck to you in the new role, and thanks for taking my questions. You know, I'm going to take a similar tack. You know, I've covered Owens-Illinois since 1992.

Speaker Change: And I've seen good years, bad years, but I've seen many.

Speaker Change: restructuring and optimization and redirection programs for OI over the years. And

Speaker Change: One of the things that winds up being the interference, as you put it, Gordon, is the inherent fixed cost.

Speaker Change: of the business. In many ways, it lends itself to a command and control style because you just, you have to run or else you're gonna get eaten alive by the fixed cost.

Gordon Hardie: So, why is this latest iteration of being more decentralized, being close to the customer, going to work, when in the past, it hasn't necessarily worked out as you wish.

Gordon Hardy: So why is this latest iteration of being more decentralized?

Gordon Hardy: Being closer to the customer, going to work, when in the past it hasn't necessarily worked out.

Gordon Hardie: And candidly, again, you've been on the board since 2015. What's been the interference from management standpoint and doing some of these things, if in fact they should have been done.

Speaker Change: As you wish. And candidly, again, you've been on the board since 2015, what's been the interference from a management standpoint in doing some of these things, if in fact they should have been done? And then I had a question on MAGMA.

Gordon Hardie: And then I had a question on magma. Sure, thanks for that, Josh, and I look forward to the media at some stage. Same here. You know, I think where we're coming from is over the last five to seven years. As I said, I think the team has done a very good job on bringing some sort of core disciplines around operations and execution to the business that weren't there before. And I believe, no, we have, we have really strong foundational capability around supply chain and operations, you know, customer engagement, pricing discipline, and so on.

Speaker Change: Sure. Thanks for that, Josh, and I look forward to meeting you at some stage. Same here.

Speaker Change: You know, I think where we're coming from is over the last five to seven years, as I've said, I think the team has done a very good job on bringing some sort of core disciplines around operations and execution to the business that weren't there before.

Gordon Hardie: So, where we're going is, I've been in about 20% of our plans. So, I've visited about 18% of our plans, spoke to a lot of people across our total chain. And, you know, there are many, many ideas on how to prove the operations of the business. And, you know, for my, for my backgrounds, I've worked in, you know, heavy manufacturing businesses and capital intensive businesses. And, you know, I have metadologies that we've introduced already to the business. And to give an example, we've taken two of the fitness plans in one geography in, you know, why, and we put it through, you know, a four-week assessment.

Speaker Change: Where we're going is...

Operator: I've been in about 20% of our plants, so about 18% of our plants, spoke to a lot of people across our total chain in OI, and we put them through, you know, a four-week assessment, and from that assessment, in two of our fittest plants, we see, you know, 10 to 15 percent efficiency improvement, driving the operation of excellence to a new level. We're bringing in some sort of new capability and new You know, much more, much more effectively, and drive cash out of them in a way that hasn't been done before.

Speaker Change: I've been in about 20% of our plants, so about 18% of our plants, spoke to a lot of people across our total chain.

Speaker Change: And, you know, there are many, many ideas on how to prove the operations of the business. And, you know, from my background, I've worked in, you know,

Speaker Change: Heavy Manufacturing Businesses and Capital Intensive Businesses. And, you know, I have methodologies that we've introduced already to the business. And to give you an example, we've taken two of the fittest plants in one geography.

Speaker Change: in OI, and we put it through, you know, a four-week assessment, and from that assessment, in two of our fittest plants, we see, you know, 10 to 15 percent efficiency improvements.

Gordon Hardie: And from that assessment in two of our fitness plans, we see 10 to 15% efficiency improvements. And you map that out across the network, and you, you can see size of the opportunity. And I stress that, you know, those assessments are, you know, based on process improvements and way of working improvements, not requiring a whole lot of capital, if any at all. And so, I believe just driving the operation of excellence to a new level, we're bringing in some sort of new capability and new ways of thinking and new ways of running the plants. There's significant opportunity.

Speaker Change: And you map that out across the network, and you can see sizable opportunity. And I stress that those assessments are based on process improvements and way of working improvements, not requiring a whole lot of capital, if any at all.

Speaker Change: And so I believe just.

Speaker Change: driving the operational excellence to a new level, we're bringing in some sort of new capability and new ways of thinking and new ways of running the plant, there's significant opportunity.

Gordon Hardie: I also think in terms of just running the assets harder. You know, we have quite a bit of spare capacity. You know, there are opportunities, I think, to sweater assets, you know, much more, much more effectively and drive cash out of them in a way that hasn't been done before. And if you look at our end-to-end supply chain, you know, the way we work with suppliers currently and the way we work with customers, I see opportunities to improve that. I've spoken to quite a number of our suppliers. And when I ask them, what can we do differently? You know, there's five, six, seven, eight ideas on how we can work more effectively together and strip ways out of the supply chain.

Speaker Change: I also think in terms of just running the assets harder, you know, we have quite a bit of spare capacity, you know, there are opportunities, I think, to sweater assets.

Speaker Change: You know much more much more effectively and drive cash out of them in a way that hasn't been done before

Gordon Hardy: And if you look at our end-to-end supply chain, the way we work with suppliers currently and the way we work with customers, I see opportunities to improve that. I've spoken to quite a number of our suppliers, and when I ask them what we can do differently, there are five, six, seven, eight ideas on how we can work more effectively together and strip waste out of the supply chain. And, you know, I think... As I said, I've read through all of the capexes of 23 and 24, and, you know, I see opportunities for us to become much more selective and much more demanding of returns on capital.

Speaker Change: And if you look at our end-to-end supply chain, you know, the way we work with suppliers currently, and the way we work with customers.

Speaker Change: I see opportunities to improve that.

Speaker Change: I've spoken to quite a number of our suppliers, and when I ask them what can we do differently, you know, there's five, six, seven, eight ideas on how we can work more effectively together and strip waste out of the supply chain.

Gordon Hardie: Likewise, with customers, this is an industry and this is a sort of a rough average across the whole industry, but forecast accuracy or the forecast accuracy from customer to supplier is somewhere between 50 and 70%. And that represents a lot of opportunities for both sides, you know, to again get more efficient strip ways sold and generate more cash. and, you know, I think, as I said, I've read through all of the capexes of 23 and 24 and, you know, I see opportunities for us to become much more selective and much more demanding on returns on capital.

Speaker Change: Likewise with customers. This is an industry and this is a sort of a rough average across the whole industry but forecast accuracy, order forecast accuracy from customer to supplier is

Speaker Change: somewhere between 50 and 70 percent and that represents a lot of opportunities for both sides, you know, to again get more efficient strip waste sold and generate more cash.

Speaker Change: And, you know, I think...

Speaker Change: As I said, I've read through all of the capexes of 2023 and 2024, and I see opportunities for us to become much more selective and much more demanding on returns on capital.

Gordon Hardie: And I think, finally, you put all that together; you end up being a more competitive company. And then you can really go after kind of more profitable growth. And I've spoken to customers, for example, that have said, hey, we've had opportunities over the years that, you know, we would have liked to put your way, but we weren't able to take those opportunities because our cost base was too high and couldn't get the returns. So we're going to address that and those, you know, those types of opportunities which are ongoing. As our customers grow, you know, there'll be opportunities for profitable growth, you know.

Speaker Change: And I think finally there's, you put all that together, you end up being a more competitive company.

Speaker Change: Then you can really go after kind of more profitable growth. And I've spoken to customers, for example, that have said, Hey, we've had opportunities over the years that, you know, we would have liked to put your way.

Gordon Hardy: And I think, when you put all that together, you end up being a more competitive company. And then you can really go after kind of more profitable growth. And I've spoken to customers, for example, that have said, hey, we've had opportunities over the years that we would have liked to put your way, but we weren't able to take those opportunities because our cost base was too high and we couldn't get the returns.

Speaker Change: We weren't able to take those opportunities because our cost base was too high and couldn't get the returns. So we're going to address that and those types of opportunities which are ongoing as our customers grow.

Gordon Hardy: So we're going to address that and those types of opportunities which are ongoing as our customers grow. You know, there'll be opportunities for profitable growth. Yeah. So that's how I think about it. You know, I can't comment on the past.

Gordon Hardie: So that's how I think about it. You know, I can't comment on the past.

Gordon Hardie: I'm here to kind of drive the present and create a much better future for, for a while.

Gordon Hardy: I'm here to kind of drive the present and create a much better future for OI. Thank you for the candidness there. I guess my other question is, what are we saying about magma at this juncture relative to what the company's expectations might have been two, three years ago? And what do you think the investment in magma has been today? Is it half a billion dollars? Any way to size that?

Josh Stuffles: Understood. Listen, my love. And thank you for the candidness there.

Speaker Change: Understood. Listen, my last, and thank you for the candidness there, I guess my other question...

Josh Stuffles: I guess my other question, what are we saying about magma at this juncture relative to what the company's expectations might have been two, three years ago? And have, you know, what do you think that the investment in magma has been today? Is it half a billion dollars? You know, any way to size that? So how is the vision on magma change and what's investment in it at present?

Speaker Change: What are we saying about magma at this juncture relative to what the company's expectations might have been?

Speaker Change: 2-3 years ago and have you know what do you think that the investment in magma has been today is it half a billion dollars you know any any way to size that so how is the vision on magma change and what's the investment in it at present thank you and good luck in the quarter and we look forward to meeting with you as well

Gordon Hardy: So how is the vision for magma changing, and what's the investment in it at present? Thank you and good luck in the quarter. And we look forward to meeting with you as well. All right, thanks very much. Look, Magma is a very exciting technology that has the potential to change how we work, how we invest, and how we run the plant. So the technology works. We go live this month on our Gen 2 facility in Bowling Green, Kentucky, which is a world-class facility where all the operating technologies of Magna are going to be sort of road-tested at commercial scale.

Gordon Hardie: Thank you, and good luck in the quarter. And we look forward to meeting with you as well. All right. Thanks very much. Look, magma of magma is a very exciting technology that has the, you know, potential to change how we work, how we invest, how we run the plant and how we work with customers. So the technology works. We, we go live this month on our gen two facility in Bowling Green in Kentucky, which is a world class facility. Where all the operating technologies of magma are going to be sort of road tested at commercial scale, and we're confident that, you know, we're, we're well on track there.

Speaker Change: Alright, thanks very much. Look, Magma is a very exciting technology that has the, you know, potential to change how we work, how we invest, how we run the plant.

Speaker Change: and how we work with customers.

Speaker Change: So the technology works. We go live this month on our Gen 2 facility in Bowling Green in Kentucky, which is a world-class facility.

Speaker Change: where all the operating technologies of Magna are going to be road-tested at commercial scale and we're confident that we're well on track there.

Gordon Hardie: But when I look at magma, I see opportunities for us to monetize and extract value from magma much earlier than maybe the, the, the previous plan. So what I've said to the magma team, who are, you know, world-class engineering talent, who are bringing first-world kind of technology and glass here, and our commercial team, who work very closely with many of the leading brands in the world. How do we make this, you know, deliver returns faster? And that's what I'm focused on. You know, we also have Gen three, as you know, but I really want us to get focused on extracting value from the assets that we have sooner than a than his plan.

Gordon Hardy: And we're confident that, You know, we're well on track there. But when I look at Magma, I see opportunities for us to monetize and extract value from Magma much earlier than maybe the previous plan. So what I've said to the Magma team, who are, you know, world-class engineering talent, who are bringing first-of-the-world technology and glass here, and our commercial team, who work very closely with many of the leading brands in the world. And George, to your second question, the level of investment, we've invested over about a five-year period of time about $200 million on the direct R&D expense side.

Speaker Change: So, what I've said to the Magma team, who are world-class engineering talent, who are bringing first-of-the-world kind of technology and glass here, and our commercial team who work very closely with many of the leading brands in the world.

Speaker Change: How do we make this?

Speaker Change: you know, deliver returns faster.

Speaker Change: And that's what I'm focused on. You know, we also have Gen 3, as you know, but I really want us to get focused on extracting value from the assets that we have sooner than is planned. So, that really is the change in focus.

Gordon Hardie: So that really is, is the change in focus. And, you know, I think the team is excited about it, actually, putting it to work earlier. And, and George, to your second question, the level of investment we've invested over about a five-year period of time, about $200 million on the direct R&D expense side. We've also put about $40 million into R&D capex. So that's the total kind of R&D component.

Speaker Change: Yeah, I think the team are excited about it, actually, putting it to work earlier.

Speaker Change: And George, to your second question, the level of investment, we've invested over about a five-year period of time about $200 million on the direct R&D expense side. We've also put about $40 million into R&D CapEx.

John A. Haudrich: We've also put about $40 million into R&D CapEx. So that's the total kind of R&D component. And then, of course, we've also been spending CapEx over the last few years to build out our facility in Holzmannen, which was generation one, as well as the Bowling Green facility, which is in excess of $100 million of investment at that particular facility. So to give you an idea of the level. And just an add-on to Magma, what this technology does is it gives us switch-on, switch-off capability in the plants, as opposed to running them, you know, 24-7, 365.

Gordon Hardie: And then, of course, we've been also spending CAPEX over the last few years to build out our facility and holds men and was the generation one as well as the Bowling Green facility that's an inaccessible $100 million of investment at that particular facility. So to give you an idea at a level of investment. And just an add-on on magma, what this technology does, it gives a switch on switch off capability in the plants as opposed to running them, you know, 24/7, 365. And that allows you to radically reshape how you run plants and the flexibility you have, and so on.

Speaker Change: So that's the total kind of R&D component. And then, of course, we've been also spending CAPEX over the last few years to build out our facility in Holzmannen, which was the Generation 1, as well as the Bowling Green facility that's in excess of $100 million of investment at that particular facility, so to give you an idea of the level of investment.

Speaker Change: and that allows you to, you know, radically reshape how you run plants and the flexibility you have and so on.

Gordon Hardie: And why not bring that closer and move faster on it if it's there to generate better returns, better flexibility. And I think it also opens up different types of strategic discussions with customers that will allow us to grow with customers more effectively. Particularly in logistically difficult markets. So that's the rationale behind it. And, you know, we're looking to deliver cash from it sooner rather than later.

Speaker Change: Why not bring that closer and move faster on it, if it's there, to generate better returns, better flexibility. And I think it also opens up different types of strategic discussions with customers.

Gordon Hardie: And when we go to our IDA in March, we'll lay this out in a lot more detail, amongst other things.

Speaker Change: And when we go to our I-Day in March, we'll lay this out in a lot more detail.

Unnamed Speaker: All of them are. I'm sorry. This one's a little bit different. It's the most... Oh, I'm not going to show this. And I don't want to embarrass myself.

Josh Stuffles: Thank you, gentlemen. Thank you.

Operator: Yeah. Yeah. Thank you, gentlemen. The next question is from Mike Roxland from Truris Securities. The line is now open, please go ahead.

Unnamed Speaker: I'm just going to... I'll show you. Yeah. I'll show you.

Speaker Change: Thank you, gentlemen.

Mike Rothman: The next question is from Mike Rothman from Tourist Security. The line is now open. Please go ahead.

Speaker Change: Thank you. The next question is from Mike Roxland from Truris Securities. The line is now open. Please go ahead.

Unnamed Speaker: Oh, yeah. I've got it. I've got it. Yeah. That's what I said.

Unnamed Speaker: I've got it. Yeah. I've got it. I've got it. I've got it. I've got it. I've got it.

Unnamed Speaker: Yeah, yeah. I've got it. Yeah, yeah. I've got it.

Mike Rothman: Thank you, Gordon, John, and Chris, for taking my questions, and Gordon, congrats on the role. I look forward to working with you. Thanks, Mike. Gordon, you mentioned, you know, targeting more profitable segment and customers. You mentioned, you know, one of the, I guess one of the holes in the portfolio, not having enough premium exposure. Can you give us some more color around, you know, how you intend to gain share in profitable time to cut this? Have you started? Is it just targeting premium, or the other avenues for you to drive more profitable growth? And have you, have you actually started to prove some business and walk away from unpopular accounts on popular business?

Gordon Hardy: Thanks, Mike. Gordon, you mentioned targeting more profitable segments and customers; you know slightly how the plants operate and how they're configured, and you know you need to train people a bit differently what to do. So that's on the one hand.

Michael Andrew Roxland: Thanks Mike.

Michael Andrew Roxland: Gordon, you mentioned, you know, targeting more profitable segments and customers. You mentioned, you know, one of the, I guess, one of the holes in the portfolio, not having enough premium exposure.

Michael Andrew Roxland: Can you give us some more color around, you know, how you intend to gain share in profitable sending to customers? Have you started? Is it just targeting premium or are there other avenues for you to drive more profitable growth?

Speaker Change: and have you actually started to prove some business and walk away from unprofitable accounts, unprofitable business?

Gordon Hardie: Yeah. So, you know, the way the way the categories, the consumer categories, you know, that we serve through our customers, the structure is there tends to be, you know, commodity, you know, mid-premium, premium, and then, you know, super premium and above. And if I take a look at our portfolio, about 80% of it is in that mid-premium and below, and about 20%, you know, 17-20% bit above. So, we're under indexed when you see, you know, the premium portfolios of many of our customers, both small and large. And, you know, a lot of that is legacy because of the plants, you know, they were geared towards kind of mainstream beer.

Speaker Change: Yeah, so, you know, the way, the way the categories, the consumer categories, you know, that we serve through our customers are structured is there tends to be, you know, commodity, you know, mid, mid premium, premium. And then.

Speaker Change: Super Premium and above. And if I take a look at our portfolio, about 80% of it is in that mid-premium and below and about 20% you know 17, 20% is a bit above.

Speaker Change: So, we're under-indexed when you see, you know, the premium.

Speaker Change: portfolios of many of our customers, both small and large.

Speaker Change: and you know a lot of that is legacy because of the the plants the you know they were geared for all kind of mainstream beer and we have in in some of our operating businesses very effectively you know change the the operations of the plant to service those markets

Gordon Hardie: And we have in some of our operating businesses very effectively, you know, changed the operations of the plant to service those markets. And we're going to double down on that; you know, the better margins in premium and super premium, and I think that's an opportunity. You know, you need to change. You know, slightly how the plants operate and how they're configured, and you know, you need to train people a bit differently what to do. So that's on one hand. We also have outstanding design capability in this business. You know, we have a hand in advising our clients on some of the most glorious packaging that you see in the market on the shelves and on the back bars.

Speaker Change: And we're going to double down on that, you know, there's better margins in premium and super premium, and I think that's an opportunity. You know, you need to change, you know, slightly how the plants operate and how they're configured.

Speaker Change: You know, you need to train people a bit differently what to what to do. So that's on one hand. We also have outstanding design capability in this business. You know, we have a hand in.

Gordon Hardy: We also have outstanding design capability in this business. You know, we have a hand in advising our clients on some of the most glorious packaging that you see in the market and on the shelves and on the back bars. I mean ROI designers have a hand in that.

Speaker Change: advising our clients on some of the most glorious packaging that you see in the market and on the shelves and on the back bars. I mean, ROI designers have a hand in that.

Gordon Hardie: I mean, ROI designers have a hand in that. So we've tremendous capability in that area and therefore are well placed to to to enter a premium. And you know, in some parts of our business, you know, historically it just hasn't been a focus, and it'll now become a focus. And then we will put plans in place with the operating units to, you know, to drive more premium business. And you know how you win it: you win it through innovation, you win it through design, you win it through service. You, you know, that's by being a better overall supplier, more valuable supplier, a bit of weight or breath of service. You can, you can supply to our key customers.

Gordon Hardy: So we have tremendous capability in that area and are therefore well placed to enter the premium market. And, you know, in some parts of our business, you know, historically, it just hasn't been a focus, and it'll now become a focus. And then we will put plans in place with the operating units to, you know, drive more premium business. And you know how you win it.

Speaker Change: So we have tremendous capability in that area and therefore are well-placed to enter premium.

Speaker Change: and you know in some parts of our business you know historically it just hasn't been a focus and it'll now become a focus.

Speaker Change: and then we will...

Speaker Change: put plans in place with the operating units to, you know, to drive more premium business. And you know how you win it, you win it through innovation, you win it through design, you win it through service, you...

Gordon Hardy: You win it through innovation. You win it through design. You win it through service. I appreciate all the color.

Speaker Change: You know, that's by being a better overall supplier, a more valuable supplier.

Speaker Change: with a wider breadth of service you can you can you can supply to our key customers. So yeah, so that's how we're thinking about it. It's an opportunity and there are a number of different ways into it with different customers in different geographies.

Gordon Hardie: So yeah, so that's how we're thinking about it. It's an opportunity, and there are a number of different ways into it with different customers and different geographies. So, so that's what we're going to focus on, and therefore deliver better margins.

Speaker Change: So that's what we're going to focus on and therefore deliver better margins.

Mike Rothman: Got it now. Appreciate all the the color.

Gordon Hardy: And then just, you know, you mentioned significant self-help over the next 18 months. You took additional temporary production curtailment, closing at least six furnaces, and you mentioned reducing SG&A. Any more color you can provide on those initiatives? Have you identified any other plants or furnaces that can ultimately be rationalized?

Mike Rothman: And then just, you know, you mentioned also significant cell phone all the next 18 months, it's capable of additional temporary production contaminants, closing at least six furnaces you mentioned, reduced the last year day.

Speaker Change: You mentioned also significant self-help over the next 18 months, additional temporary production curtailments, closing at least six furnaces, you mentioned reducing SG&A. Any more color you can provide on those initiatives?

Gordon Hardie: Any more claim you can provide on those initiatives, have you identified any other plans or furnaces that can ultimately be fashion-wide? And how much SDNA do you intend to remove from the business? Thank you. Yeah, well, in short, yes, we have some pretty clear views right across the value channel where there's opportunities either to work more effectively with suppliers to, you know, to make the chain more efficient and share the savings. Likewise, with customers, I think there's opportunities just in the whole supply chain to work together to, you know, strip out waste and share some of the gains.

Speaker Change: Have you identified any other plants or furnaces that can ultimately be rationalized? And how much SG&A do you intend to remove from the business? Thank you.

Gordon Hardy: And how much SG&A do you intend to remove from the business? Thank you. But it's a measure I've used in other companies that very effectively helps the teams to focus on how you sweat the assets harder. Yeah. So that combination, as I said, the the the.

Speaker Change: Yeah, in short, yes. We have some pretty clear views right across the value chain on where there's opportunities either to work more effectively with suppliers, to make the chain more efficient and share the savings. Likewise, with customers, I think there's opportunities just.

Speaker Change: In the whole supply chain to work together to strip out waste and share some of the gains. And then within our own walls.

Gordon Hardie: And then within our own walls, you know, for example, you know, the example I gave there of those two plans, which are high performing plans, and yet we see opportunities of 10 to 15 percent by boosting, you know, a methodology or a concept called OE overall equipment effectiveness, which hasn't been a traditional measure in this business, but is a measure I've used in other companies that very effectively helps the teams to focus on how you how you sweat the assets harder. Yeah, so that combination, as I said, the, the, you know, what I would call portfolio momentum.

Speaker Change: by boosting a methodology or a concept called OE, Overall Equipment Effectiveness, which hasn't been a traditional measure in this business.

Speaker Change: But it's a measure I've used in other companies that very effectively helps the teams to focus on how you how you sweat the assets harder. Yeah. So that combination, as I said, the the the.

Gordon Hardie: So moving more from, you know, commodity and mid-premium to premium, you know, just clarifying, you know, where is best to do what work? We have quite a bit of duplication in the business often. So look, the way I look at it is, we're going to look at heavy activity across business. and figure out if there's a better, smarter, faster, more efficient way to do that. And that's what we've started on already. And we're going to take an economic profit lens to everything. The only time we make money is after we've paid everyone and paid our capital charge; what's left over.

Gordon Hardy: You know, just clarifying where it is best to do what work. We have quite a bit of duplication in the business often. So look, the way I look at it is we're going to look at every activity across the business and figure out if there's a better, smarter, faster, more efficient way to do that. And that's what we've started on already. So, that's how we look at it. Yeah, from all the ideas I've received from all my colleagues across the world, I'm pretty confident we've got a long list of self-help opportunities.

Speaker Change: You know, just clarifying, you know, where is best to do what work. We have quite a bit of duplication in the business often. So look, the way I look at it is, we're going to look at every activity across the business.

Speaker Change: and figure out if there's a better, smarter, faster way.

Gordon Hardie: And so we've got a pretty clear view now across our fleet where each plant lies in terms of economic profit. And we get down to skew level pretty quickly. And that then will allow us to take action. And from that point of view, if there's ten levers, you can pull eight or usually self-help and two, you've got to get some help from the customer. So that's how we look at it. And yeah, from all the ideas, and I've received from all my colleagues across the world, and I'm pretty confident we've got a long list of self-help opportunities.

Speaker Change: And so we've got a pretty clear view now across our fleet where each plant lies in terms of economic profit. And we get down to SKU level pretty quickly, and that then will allow us to take action.

Speaker Change: You know, from that point of view, if there's ten levers you can pull, eight are usually self-help, and two, you've got to get some help from the customer. So that's how we look at it.

Speaker Change: Yeah, from all the ideas I've received from all my colleagues across the world, I'm pretty confident we've got a long list of self-help opportunities.

Gordon Hardy: And Mike, all of that above is what's driving the targets that we've set for 2027. So it's substantially that self-help umbrella that accounts for the difference between our expectations this year and the 2027 preliminary targets. Got it, very clear. Best of luck. Thank you. Thank you.

John Haudrich: And Mike, all of that above is what's driving the targets that we've set for 2027. So it's substantially that self-help on Brawler that accounts for the difference between kind of our expectations this year to the 2027 for the military targets. God, it's very clear. Best of luck.

Speaker Change: And, Mike, all of that above is what's driving the targets that we've set for 2027. So it's substantially that self-help umbrella that accounts for the difference between kind of our expectations this year to the 2027 goals.

Michael Andrew Roxland: Preliminary Targets.

Michael Andrew Roxland: Got it, very clear. Best of luck.

Michael Andrew Roxland: Thank you.

Anthony Pettinari: The next question is from Anthony Patinari from CK. The line is now open. Please go ahead. Good morning. Gordon, hey, when you look at the key geographies that O.I. operates in, you know, maybe US, Mexico, Brazil, Europe, how would you kind of rank the business performance in terms of, you know, regions where you're maybe closer to fit to win or regions where maybe you have a lot more work to do. And then I guess second question may be kind of related. I mean, your predecessor made the decision to exit Asia, which was, you know, a big part of O.I.

Speaker Change: Thank you.

Speaker Change: The next question is from Anthony Pettinari from Citi. The line is now open. Please go ahead.

Anthony James Pettinari: Good morning. Good morning. Gordon, hey, when you look at the key geographies that OI operates in, you know, maybe U.S., Mexico, Brazil, Europe ,

Anthony James Pettinari: How would you kind of rank the business performance in terms of, you know, regions where you're maybe closer to fit to win or regions where...

Speaker Change: Maybe you have a lot more work to do. And then I guess second question may be kind of related. I mean, your predecessor made the decision to exit Asia, which was a big part of Hawaii historically.

Gordon Hardie: historically. Would you look, you talked about growing in markets, would you look at potentially pairing the portfolio or exiting certain geographies as well?

Speaker Change: Would you look, you talked about growing in markets, would you look at potentially pairing the portfolio or exiting certain geographies as well?

Gordon Hardie: Yeah, let me answer the second part first, if I may. So our focus, as we've laid out, is in horizon one getting fit, getting super fit, and in horizon two, you know, building momentum by seeking all kind of profitable growth. In terms of expansion into new geographies, I really see that as a horizon three when we're really, you know, operationally and financially in a position to bring some value, you know, to those markets and bring some value to customers that are operating there, either those already there, or, you know, we have customers that are looking to expand their footprint as well, and there are opportunities to do that.

Speaker Change: Yeah, let me answer the second part first, if I may. So our focus, as we've laid out, is in Horizon 1, getting fit, getting super fit.

Speaker Change: And on horizon two, you know, building momentum by seeking out kind of profitable growth.

Speaker Change: In terms of expansion into new geographies, I really see that as a horizon three when we're really

Speaker Change: operationally and financially in a position to bring some value to those markets and bring some value to customers that are operating there, either those already there, or we have customers that are looking to expand.

Speaker Change: their footprint as well and and there there there are opportunities to do that but that is not the primary focus at the moment. Will it become a strategic option for us, geographical expansion? Yes and just not right now.

Gordon Hardie: But that is not the primary focus at the moment. Would it become a strategic option for us to get expansion? Yes, and just not right now. You know, so that's the, the, the, the other part of the, or the second part of the question. Could you remind me of the first part again? Well, it's just a wind region, yeah, wind. Sorry, yeah.

Speaker Change: You know, so that's the other part of the, or the second part of the question. Could you remind me of the first part again?

Speaker Change: So which ones are closer fit to win?

Gordon Hardie: So which ones are close to fit to win? Look, we have a range. Okay, we have very fit businesses in Latin America. You know, we, but there's still opportunity there. And you know, historically, I think the North American business was skewed more to beer, and that category obviously has declined. And so there's a, there's a shift required there. And you know, we've got a good spread of good businesses across Europe. You know, every business in our portfolio has an opportunity to improve, some more than others and some in different parts than others. Some are maybe, you know, but better on manufacturing and supply chain, you know, maybe less on innovation.

Gordon Hardy: Look, we have a range. Okay, we have very profitable businesses in Latin America. You know, we, but there's still opportunity there. And, you know, historically, I think North American business was skewed more to beer, and that category obviously has declined, and so there's a shift required there.

Speaker Change: Look, we have a range, okay. We have very fit businesses in Latin America, you know, we, but there's still opportunity there. You know, historically, I think the North American

Speaker Change: Business was skewed more to beer when that category obviously has declined and so there's a there's a shift required there And you know, we we've got a good spread of good businesses across Europe

Gordon Hardy: And, you know, we've got a good spread of good businesses across Europe. You know, every business in our portfolio has an opportunity to improve some more than others and some in different areas than others. Some are maybe better at manufacturing and supply chain, you know, maybe less so at innovation.

Speaker Change: You know every business in our portfolio has an opportunity to improve Some more than others and some in different parts than others

Speaker Change: Some are maybe, you know, better on manufacturing and supply chain, you know, maybe less on innovation. So there's a...

Gordon Hardy: So there's a there's a, Okay, and would you look at exiting geographies as, you know, OI did with Asia, or is that not on the table now? The way I look at it is, what is the EP profit pool, and can we get a reasonable share of it? If there ever came a situation where there was no path to economic profit, yeah, we'd re-divert capital elsewhere.

Gordon Hardie: So, there, there's a, there's a, there's a patchwork if you like. And what we're doing is systematically saying to each part of the business, okay, from our analysis and from what the customers are saying and where the market opportunities are. Here is a defined program of levers and self-help levers to work on. So the pitch of varies by market and by geography and by business. But I would say across the board, every operating unit and every part of the business has an opportunity to improve.

Speaker Change: There's a patchwork, if you like, and what we're doing is systematically saying to each part of the business, okay,

Speaker Change: from our analysis and from what the customers are saying and where the market opportunities are.

Speaker Change: Here is a defined program of leavers and self-help leavers to work on. So the picture varies by market and by geography and by business, but I would say across the board,

Speaker Change: Operating units in every part of the business has an opportunity to improve.

Gordon Hardie: Okay, and would you look at exiting geographies as, you know, oh, I did with Asia, or is that not on the table now? The way, the way to look at it is, what, what is the profit pool? You know, and you know, can we get a reasonable share of it? If there ever came a situation where there was no path to economic profits, yeah, we, we'd re-diverse capital and swear. But as I look at the spread of markets, we have at the moment, I see a path to improving our economic profit in all the geographies in which we operate.

Speaker Change: Okay and would you look at exiting geographies as you know I did with Asia or is that not?

Speaker Change: On the table now.

Speaker Change: The way I look at it is, what is the EP profit pool?

Speaker Change: You know, and, you know, can we get a reasonable share of it?

Speaker Change: If there ever came a situation where there was no path to economic profit, yeah, we'd re-divert capital elsewhere. But as I look at the spread of markets we have at the moment, I see a path to improving our economic profit in all the geographies in which we operate.

Gordon Hardy: But as I look at the spread of markets we have at the moment, I see a path to improving our economic profit in all the geographies in which we operate. Okay, that's helpful. I'll turn it over to you.

Gordon Hardie: Okay, that's helpful.

Anthony Pettinari: I'll turn it over.

Speaker Change: Okay, that's helpful. I'll turn it over.

Josh Setter: Thank you.

Josh Setter: The next question is from Josh Setter from UBS. The line is now open. Please go ahead. Hi, good morning. Actually, with the chance we can up your half of Josh. Yeah, thank you for taking my question, and congratulations on the new rule garden. So, well, we actually have a few questions in terms of the EBITDA guidance. So my first question is, best down the current trends, entering into the second half. Can we say with confidence that there will be no further guidance cards for this year, and also any color on course of the EBITDA distribution for second half.

Operator: Thank you. The next question is from Josh Spetter from UBS. The line is now open.

Speaker Change: Thank you.

Speaker Change: The next question is from Josh Betta from UBS. The line is now open, please go ahead.

Speaker Change: Hi. Good morning. Actually, this is Sean speaking on behalf of Josh. Yeah, thank you for taking my question, and congratulations on the new Rogue Garden.

Speaker Change: So, well, we actually have a few questions in terms of the EBITDA guidance.

Speaker Change: So, my first question is, based on the current trend entering to the second half, can we stay with confidence that there will be no further guidance cut for this year, and also any color on quarterly EBITDA distribution for second half? Thank you.

John Haudrich: Thank you.

John Haudrich: Yeah, what I would say is that this is John. So, so we, we, you know, really take a look at the forward, you know, volume outlook for the business and, and obviously we try to take a reasonably conservative view of what is the possible range. Pluses and minuses, and I believe that our guidance accounts for a reasonably wide range of possible outcomes, including the software demand. And that would be the primary variable that it would be driving any, any variance in our outlook right now. Obviously, what we did here was we took a, a, a pretty big impact in the third quarter in particular with the, you know, the, the downtime that we're taking and accelerating in that.

Speaker Change: Yeah, what I would say is that, this is John , so we, you know,

John A. Haudrich: really take a look at the forward volume outlook for the business. And obviously, we tried to take a reasonably conservative view of

John A. Haudrich: of what is the possible range, pluses and minuses, and I believe that our guidance accounts for a reasonably wide range of possible outcomes, including softer demand, and that would be the primary variable that would be driving any variance in our outlook right now.

John A. Haudrich: Obviously, what we did here was we took a pretty big impact in the third quarter in particular with the downtime that we're taking and accelerating in that, so that's all part of that. That's the biggest driver for our change.

John Haudrich: So that's all part of that. That's the biggest driver for our change. Frankly, if, if we weren't taking those actions, we probably would be at the south end of our current range. But we are doing that is the right move to set us up for the next year that that precipitated the bigger change in the outlook. And as far as the distribution of the outlook on that, as you can see, Europe has transitioned first into more positive sales volume in that regard, but it's also the market where we have to do a little bit more catch up on the inventory control.

John A. Haudrich: Frankly, if we weren't taking those actions we'd probably be at the south end of our current range, but we are doing that. It's the right move to set us up for the next year that that's precipitated the bigger change in the outlook.

Speaker Change: And as far as the distribution of the outlook on that, as you can see, Europe has transitioned first into more positive sales volume.

Speaker Change: In that regard, but it's also the market where we have to do a little bit more catch-up on the inventory control So I would say that you know what the North American market or the America's market is probably seeing a little bit slower Recovery on the demand as far as a year-over-year basis and things like that But more of the catch-up in the downtime is over in Europe . So it's they're both

John Haudrich: So I would say that, you know, what the North American market or the America's market is probably seeing a little bit slower recovery on the demand as far as that you're over your basis and things like that. But more of the catch up in the downtime is over in Europe. So they're both probably equal, but, you know, for different. Reasons. Okay, thank you.

Speaker Change: probably equal but that you know for different reasons.

Operator: Okay, thank you. And also, in some style, the evidence distribution between the third quarter and the fourth quarter, so do you mind also giving some color on that? Yeah, obviously, we're not providing a lot of details on the 2007 Outlook. Again, we'll do that more than I day, but back to earlier conversations. And this is mostly driven by self-help activities.

John Haudrich: So, and also in some style, the EBITDA distribution between, so the quarter and the fourth quarter and so do you mind also gave some color on that? Thank you. The third quarter is going to have our peak net price pressure. You've seen about 50 to $60 million in net price pressure year to date. We're going to see more than that in the third quarter alone. It has to do with two factors. One is a comp-based question in comparisons against last year. And the fact that energy and logistics costs in the first half of the year were softer or lower inflation than we originally were anticipating.

Speaker Change: Okay, thank you. So, and also in terms of the EBITDA distribution between third quarter and the fourth quarter, so do you mind also give some color on that? Yeah, thank you.

John A. Haudrich: Thornton.

Thornton: Third and fourth quarter. Yeah, okay, so if you take a look at the main drivers that are going on in the business, in the third quarter, obviously, we're looking at a soft quarter. It's driven by two factors. One is the third quarter is going to have our peak net price pressure,

Thornton: You've seen about 50 to 60 million dollars in net price pressure year-to-date.

Thornton: We're going to see more than that in the third quarter alone. It has to do to two factors. One is a comp-based question, comparisons against last year, and the fact that energy and logistics costs in the first half of the year were softer, were lower inflation than we originally were anticipating.

John Haudrich: And in some geographies, we passed that back to our customers on a timely basis, so that's flushing through in that regard. We would expect net price to be better in the fourth quarter relative to the third quarter. And then in the third quarter, we're going to take a pretty meaningful impact: over $100 million impact, 50 cents per share alone on the inventory curtailment activity. But in the fourth quarter, that's actually going to should be a positive because we took significant action last year. Even though we're going to continue to take down time in the fourth quarter, it's going to be less than the 20% or so that we had in the previous fourth quarter period.

John A. Haudrich: And in some geographies, we pass that back to our customers on a timely basis. So that's flushing through in that regard. We would expect net price to be better in the fourth quarter relative to the third quarter.

John A. Haudrich: And then in the third quarter, we're going to take a pretty meaningful impact, over $100 million impact, $0.50 per share alone on the inventory curtailment activity.

John A. Haudrich: But in the fourth quarter, that should be a positive because we took significant action last year. Even though we're going to continue to take downtime in the fourth quarter, it's going to be less than the 20% or so that we had in the previous fourth quarter period. So hopefully that gives you a little bit of texture of the moving parts.

John Haudrich: So, hopefully that gives you a little bit of texture of the moving parts.

John Haudrich: Yes, thank you.

John Haudrich: My last question is about the EBITDA bridge; actually, how we should think about the EBITDA bridge from the 2024 and to the 2007 1.5 billion dollars target? Yeah, obviously we're not providing a lot of details on the 2007 outlook. Again, we'll do that more than I did, but back to earlier conversations. Yeah, this is mostly driven by self-help activities, and I think you would substantially see that in the cost performance line of the business without taking a big, big hard stance just yet on the commercial outlook for the business.

Speaker Change: Okay, thank you. Yeah, my last question is about the EBITDA Breach. Actually, how we should think about the EBITDA Breach from 2024 until the 2027 1.5 billion dollars target.

Speaker Change: Yeah, obviously, we're not providing a lot of, you know, details on the 2000...

Speaker Change: This is mostly driven by self-help activities, and I think you would substantially see that in the cost performance line of the business without taking a big hard stance just yet on the commercial outlook for the business.

Operator: And I think you would substantially see that in the cost performance line of the business without taking a big, hard stance just yet on the commercial outlook for the business. Thank you very much. I will take it over.

John Haudrich: Thank you very much.

John Haudrich: I would think it's over.

Speaker Change: Thank you very much. I will take it over.

Aaron Rothman: Thank you. The next question is from Aaron; this one of them, from RBC Kapitun markets. The line is now open. Please go ahead. Great. Thanks for taking my question, and good to see you because he's already. So, I guess the question I had was when you look at the guidance revision, it looks like you're cutting it by about 60 cents at the midpoint. You gave some statements in the presentation this time and the last that each 1% reduction in volume and production is 20 cents on EPS. So, is that kind of how we're thinking maybe like a 3% reduction in combined in both as far as how you're thinking about the revised outlook?

Operator: The next question is from Arun Viswanathan from RBC Capital Markets. The line is now open. Please go ahead. Great, thanks for taking my question. And I get to see because he's already there.

Speaker Change: Thank you. The next question is from Arun Viswanathan from RBC Capital Markets. The line is now open. Please go ahead.

Operator: So I guess the question I had was, when you look at the guidance revision, it looks like you're cutting it by about 60 cents at the midpoint. You gave some, you know, statements in the presentation this time and last that each 1% reduction in volume and production is 20 cents in EPS. So is that kind of how we're thinking, maybe like a 3% reduction combined in both, as far as you're thinking about the revised outlook? Gordon, I echo what everyone said. Good luck in your new role. John, good morning.

Arun Shankar Viswanathan: Great, thanks for taking my question and I get to speak with you already. So, I guess the question I had was, when you look at the guidance revision, it looks like you're cutting it by about 60 cents at the midpoint.

Speaker Change: You gave some statements in the presentation, this time and last, that each 1% reduction in volume and production is $0.20 on EPS.

Speaker Change: So is that kind of how we're thinking, maybe like a 3% reduction combined in both, as far as how you're thinking about the revised outlook?

John Haudrich: Yeah, I would say that on the sales side, it is probably in that neighborhood of 2% to 3%. We're talking probably about a 4% change in our outlook on production, a little bit more than that, and yet you could extend those by those numbers that we provide there. So, in other words, the incremental production down time is worth about 50 cents, and then the volume is something in this call it anywhere 10 to 20 cents type of range, and then you got the tax impact.

Speaker Change: Yeah, I would say that on the sales side, it is probably in that neighborhood of 2-3%. We're talking probably about a 4% change in our outlook on production, a little bit more than that. And yeah, you could extend those by those numbers that we provide there. So in other words, the incremental production downtime is worth about $0.50.

Speaker Change: and and then the the volume is something in this call it anywhere 10 to 20 cent type of range and then you got the tax impact.

John Haudrich: Great, thanks for that, John.

John Haudrich: And as a follow-up, given these steep actions you are taking now on the inventory side in Q3, and then you just think about, you know, some of the category performance in Osperic is still destocking, but would you say that Q3 really would kind of constitute a bottom as far as operating our economic profit, and should we expect, you know, when should we expect growth on that, on the economic profit side, and how are you going to track that and kind of report that to us? Yeah, I'll expand on that, and we will look to provide more details on both the calculation methodologies and future discussions and quarters, and certainly expand on that a lot more during the Investor Day.

Speaker Change: Great. Thanks for that, John . And as a follow-up, I guess...

Speaker Change: Given these steep actions you are taking now on the inventory side in Q3, and then you just think about some of the category performance, I know Spirits is still destocking, but...

Speaker Change: Would you say that Q3 really would kind of constitute a bottom as far as operating our economic profit and should we expect, you know, when should we expect growth on that, on the economic profit side and how are you going to track that and kind of report that to us?

Speaker Change: Yeah, I'll expand on that. And we will look to provide more details on both the calculation methodologies and future discussions and quarters and certainly expand on that a lot more during the Investor Day. If we take a look at 2023, we were economically profitable a little bit, single-digit spread margins.

John Haudrich: If we take a look at 2023, we were economically profitable, a little bit, single-digit, you know, spread margins. This year, with everything that's going on, we will be down single, you know, low single digits on the economic spread methodop, you know, approach and things like that. With that said, the lowest point probably would be the third court just given the significant, you see it in the P&L with the numbers and that we're referring to, but also the significant impact that we're taking on both the downtime and ultimately some restructuring charges that we'll be taking over the balance of the year here, too.

Speaker Change: This year, with everything that's going on, we will be down single, you know, low single digits.

Speaker Change: on the economic spread method, you know, approach and things like that. With that said, the lowest point probably would be the third quarter, just given the significant, you see it in the P&L with the numbers and what we're referring to, but also the significant impact that we're taking on both the downtime and ultimately some restructuring charges that we'll be taking over the balance of the year here too. So we would expect that to bounce back.

John Haudrich: So we would expect that to bounce back as far as where we go from there, and next year in the cadence of that, you know, we'll lay that out more in detail in the future.

Speaker Change: As far as where we go from there next year and the cadence of that, you know, we'll lay that out more in detail in the future.

Gabe Hatch: Thank you. The next question is from Gabe Hatch from World's Foggle Security. The line is now open; please go ahead.

Speaker Change: Thanks.

Speaker Change: Thank you.

Speaker Change: The next question is from Gabe Hatch from Wells Fargo Security. The line is now open. Please go ahead.

Gabe Hatch: Gordon, I thought of whatever one said. Good luck on your new role. John, good morning. Thank you, good. I guess the first question is more customer-oriented. I guess in their spirit of getting products to consumers on the shelf, they presumably have a vested interest to get you all reasonably accurate forecasts. So maybe John, having benefited history, does 50 to 75% number that Gordon talked about? Has that changed a lot over time? And really what I'm getting at is I'm assuming mostly across the food and beverage industry in the past four years, forecasting accuracy has not been very good.

Gabrial Shane Hajde: Gordon, echo what everyone said. Good luck on your new role.

Operator: Thank you, Gabe. I guess the first question is more customer-oriented, and I guess in their spirit of getting products to consumers on the shelf, they presumably have a vested interest in getting you all reasonably accurate forecasts. So maybe, John, having the benefit of history, this 50 to 75% number that Gordon talked about, has that changed a lot over time? And really, what I'm getting at is, I assume mostly across the food and beverage industry in the past four years, forecasting accuracy has not been very good.

Gabrial Shane Hajde: John , good morning. Thank you, Gabe. I guess the first question is more customer-oriented, and I guess in their spirit of getting products to consumers on the shelf.

Gabrial Shane Hajde: They presumably have a vested interest to get you all reasonably accurate forecasts. So maybe, John , having benefit of history, this 50-75% number that Gordon talked about, has that changed a lot over time? And really what I'm getting at is...

Speaker Change: I'm assuming mostly across the food and beverage industry in the past four years forecasting accuracy has not been very good.

Operator: And then maybe more importantly, based on your kind of customer engagement, as you look into 25, you know, how enthusiastic are they towards BLAST as a package? And maybe from your vantage point, what are some of the near-term factors that could be temporarily impacting PACNIC?

Gabe Hatch: And then maybe more importantly, based on your kind of customer engagement, as you look in the 25, how is there enthusiasm towards glass as a package? And maybe from your vantage point, what are some of the near-term factors that could be temporarily impacting PAC-MIX?

Speaker Change: And then, maybe more importantly, based on your kind of customer engagement, as you look into 25, you know, how is their enthusiasm towards BLAST as a package? And maybe from your vantage point, what are some of the near-term factors that could be temporarily impacting PAC-Mix?

John Haudrich: I can start by just saying that that forecast accuracy is nothing new; that's been around. In particular, accuracy at the SKU level is where you really see the variance and has been kicking out for some time.

Gordon Hardy: I can start with just, hey, that forecast accuracy is nothing new that's been around. In particular, accuracy at the SKU level is where you really see the variance and have been kicking out. And I think over this kind of period, the last two years, you know, with inventory, you know, piling up, I think everybody is kind of focused on how they manage inventory in the chain more effectively. And I see clear opportunities, you know, in terms of how we work together and our supply chain teams and our customer supply chain teams work more effectively together and share data in a way maybe that we haven't historically shared in the past. So I definitely see the opportunities there. In terms of enthusiasm for glass, Eero...

Speaker Change: I can start with just, hey, that forecast accuracy is nothing new that's been around. In particular, accuracy at the SKU level is where you really see the variance and has been kicking out for some time.

Gordon Hardie: I'll turn it over to you. Yeah. And I think over this kind of period, last two years, you know, with inventory, you know, pointing up, I think everybody is kind of focused on how they manage inventory and the chain more effectively and so on.

Speaker Change: I think over this kind of period, the last two years, you know, with inventory, you know, piling up.

Gabrial Shane Hajde: I think everybody is kind of focused on how they manage inventory in the chain more effectively.

Gordon Hardie: So, you know, talking to the customers as I have been, you know, that has come up as an issue and I think everybody is much more focused on it than they would have been in previous years, right, where there was less of an issue. But with the focus on working capital and inventory, you know, it's absolutely an opportunity and, you know, I've raised it with customers and we've agreed that, you know, we're going to try and figure out how we improve that, right? You know, the better that number is, you know, the more effectively you can run your plans and the better we and customers can manage their inventory. Yeah, so that is going to be a focus for us, for absolutely sure, and, you know, and I see clear opportunities, you know, in terms of how we work together and our supply chain teams and our customer supply chain teams work more effectively together and share data in a way maybe, you know, that we haven't, you know, in the past historically shared. So I definitely see opportunities there.

Speaker Change: You know, talking to the customers as I have been, you know, that has come up as an issue and I think everybody is much more focused on it than they would have been in previous years, right, where it was less of an issue.

Gabrial Shane Hajde: But with the focus on working capital and inventory, it's absolutely an opportunity. I've raised it with customers and we've agreed that we're going to try and figure out how we improve that.

Gabrial Shane Hajde: You know, the better that number is, you know, the more effectively you can run your plants and the better we and customers can manage their inventory. Yeah. So that that is going to be a focus for us for absolutely sure. And, you know, and.

Gabrial Shane Hajde: And I see clear opportunities, you know, in terms of how we work together and our supply chain teams and our customer supply chain teams work more effectively together and share data in a way maybe, you know, that we haven't, you know, in the past historically shared. So I definitely see the opportunities there. In terms of enthusiasm for glass.

Gordon Hardie: In terms of enthusiasm for glass, you know, I mean, it's clear that glass is core to many of the world's kind of grace beverage products. And all of the customers have, you know, made it clear that glass is very, very much a part of, you know, the equity of their brands and see a big part of it. And, you know, one or two customers who both have glass and cans said to us, you know, we want to do more glass. But we also have to step up and help our customer by working with their teams to innovate more and, you know, to make packaging more attractive to customers on shelf.

Gabrial Shane Hajde: You know, I...

Gabrial Shane Hajde: I mean, it's clear that glass is core to many of the world's kind of great beverage brands.

Gabrial Shane Hajde: All of the customers have, you know, have made it clear that glass is very, very much a part of their lives.

Gordon Hardie: You know, at the retail level, you know, it's well known that, you know, the purchase decision is often made at the shelf. And you know, glass can absolutely have that. So, yeah, so, you know, I see a very kind of clear future for glass and, you know, with right across, right across all the markets we address. And then, if you look at the markets we address, we're only in about 43% of markets that's, you know, where glass is a big packaging element, right?

Gordon Hardy: The purchase decision is often made at the shelf, and Glass can absolutely help that. Yeah, so, you know, I see a very kind of clear future for glass and, Okay, real quick, maybe a modeling question. Can you give us a sense for the six furnaces that you're looking to close? Or, I guess, take them down temporarily at this point. Fixed cost savings associated with that, and trying not to be careful, or be careful not to double count, you know, giving you credit for better fixed overhead absorption going in at 25, and or fixed cost savings associated with that, if that question makes sense.

Gordon Hardie: So, you know, as you look forward to horizon three, you know, we absolutely see opportunities to grow glass.

Gabe Hatch: Okay, real quick, maybe a modeling question. Can you give us a sense for the six furnaces that you're looking to close, or I guess, take down temporarily at this point. Fix cost savings associated with that and trying to not be careful, or be careful to not double count. You know, giving you credit for better fixed overhead absorption going on in 25. And, or fixed cost savings associated with that question makes sense. Gayway, I would say that we're incurring about $180 million of incremental fixed cost absorption this year as we bring those inventories down. We won't have that cost next year through a combination of accelerated activities that we're doing on the temporary curtailment side, but also through the risk that the restructuring cost we're referring to.

Gordon Hardy: The way I would say that is we're incurring about $180 million of incremental fixed cost absorption this year as we bring those inventories down. You know, we won't have that cost next year through a combination of accelerated activities that we're doing on the temporary curtailment side, but also through the restructuring costs we're referring to. So rather than parsing them out, I think it's better to stay at a high-level perspective on them. And that's kind of a return to 25.

Speaker Change: We won't have that cost next year through a combination of accelerated activities that we're doing on on the temporary curtailment side, but also through the FIC restructuring costs, we're referring to so rather than parsing. The amount I think it is better to stay at a high level perspective.

John Haudrich: So rather than parsing them out, I think it's better to say that that's a high level perspective on, and that's kind of a return to 25 of benefit.

Speaker Change: And that's kind of a return to 25 benefit.

Christopher Manuel: Thank you. This is the NLQ any session, and I'd like to hand over to Chris Faulkler's remarks.

Speaker Change: Thank you.

Gabrial Shane Hajde: This is the end of Q&A session and I'd like to hand over to Chris for closing remarks.

Christopher Manuel: Thank you, Kiki; that concludes our earnings call. Please note, our third quarter conference call is currently scheduled for Wednesday, October 30th, and additionally, please mark your calendars for our next Investor Day, that is planned for March 14th in 2025.

Kiki: Thank you, Kiki. That concludes our earnings call. Please note our third quarter conference call is currently scheduled for Wednesday, October 30. And additionally, please mark your calendars for our next Investor Day. That's planned for March 14, 2025. In conclusion, remember to make a memorable moment by choosing safe, sustainable glass.

Christopher David Manuel: Thank you. Thank you that concludes our earnings call. Please note our third quarter Conference call is currently scheduled for Wednesday October 30th.

Speaker Change: And Additionally, please mark your calendars for our next Investor Day, that's planned for March 14th in 2025, and conclusion remember, making a memorable moment by choosing safe sustainable glass. Thank you.

Christopher Manuel: In conclusion, remember, make it a memorable moment by choosing safe, sustainable glass. Thank you.

Operator: Thank you; this concludes today's conference call. You may now disconnect your lines.

Kiki: Thank you. Thank you. This concludes today's conference call. You may now disconnect your lines.

Speaker Change: Thank you. This concludes today's conference call you may now disconnect your lines.

Gabrial Shane Hajde: Yes.

Gabrial Shane Hajde: [music].

Gabrial Shane Hajde: Okay.

Gabrial Shane Hajde: Okay.