Q2 2026 O-I Glass Inc Earnings Call

July 29, 2026

Speaker #1: For standing by. My name is Gabby, and I will be your conference moderator today. At this time, I would like to welcome everyone to the OI Glass second quarter 2026 earnings conference call.

Speaker #1: After today's prepared remote, we will host a question-and-answer session. If you would like to ask a question, please press star 1 to raise your hand.

Speaker #1: To withdraw your question, press star 1 again. I would now like to turn the call over to Quis Manuel, Vice President of Investor Relations.

Speaker #1: Please go ahead.

Speaker #2: Thank you, Gabby. Good morning, everyone, and welcome to the OI Glass second quarter 2026 earnings conference call. With me today are Gordon Hardy, our CEO, and John Hodrick, our CFO.

Speaker #2: After prepared remarks, we will open the line for Q&A. Our press release and earnings materials are available on the company's website. Please review the safe harbor statements and disclosure regarding our use of non-GAAP financial measures, included in those materials.

Speaker #1: Thank you for standing by. My name is Gabby, and I will be your conference moderator today. At this time, I would like to welcome everyone to the O-I Glass second quarter 2026 earnings conference call.

Speaker #1: After today's prepared remote, we will host a question-and-answer session. If you would like to ask a question, please press star 1 to raise your hand.

Speaker #2: Today's remarks do include. Forward-looking statements and actual results may differ materially from our current expectations. With that, I'll turn the call over to Gordon, who will begin on slide 3.

Speaker #1: To withdraw your question, press star 1 again. I would now like to turn the call over to Chris Manuel, Vice President of Investor Relations.

Speaker #3: Thank you, Chris. And good morning, everyone. Today we will review our second quarter results, discuss market conditions, and provide an updated view of our 2026 outlook and 2027 targets.

Speaker #1: Please go ahead.

Speaker #2: Thank you, Gabby. Good morning, everyone, and welcome to the O-I Glass second quarter 2026 earnings conference call. With me today are Gordon Hardie, our CEO, and John Haudrich, our CFO.

Speaker #3: Before I begin, I want to thank our OI colleagues around the world for their continued commitment and flexibility during a challenging operating period. Let me start with a straightforward assessment: we are clearly disappointed with our first half performance.

Speaker #3: Europe has not delivered the expected results as outlined in our investor day framework. We own those results, we are taking decisive action, we also think it is important to distinguish between a strategy that is not working and one where value realization has been delayed.

Speaker #2: Today's remarks do include forward-looking statements and actual results may differ materially from our current expectations. With that, I'll turn the call over to Gordon, who will begin on slide 3.

Speaker #3: We will address that distinction throughout today's discussion. With that, let me turn to recent performance. Second quarter net sales were stable, while adjusted earnings were 9 cents per share compared to 53 cents per share last year.

Speaker #3: Performance varied significantly by region. Strong Americas result helped offset substantially lower earnings in Europe, while an unusually high adjusted tax rate resulted in reduced results by 18 cents per share.

Speaker #3: Europe has not delivered the We will address that distinction throughout today's discussion. With that, let me turn to recent performance. Second quarter net sales were stable, while adjusted earnings were 9 cents per share compared to 53 cents per share last year.

Speaker #3: expected results as outlined in our investor day framework. We own those results, we are taking decisive action. We also think it is important to distinguish between a strategy that is not working and one where value realization has been delayed.

Speaker #3: In the Americas, segment operating profit increased 22% year over year, which we believe demonstrates strong execution of our strategy and the resilience of the business, even with one furnace event during the quarter.

Speaker #3: Europe was significantly below our expectations, and prior year performance. We do not believe this is a structural issue with the business or our strategy.

Speaker #3: Rather, we believe the shortfall reflected three main factors: elevated competitive pressure affecting selling prices, higher energy costs related to Middle East conflict, and unanticipated operational inefficiencies following restructuring across multiple EU plants along with two furnace events.

Speaker #3: We believe these issues are largely transitional and should improve as market conditions recover and we work through the remaining restructuring challenges. I will now comment on recent performance.

Speaker #3: Europe was significantly below our expectations, and prior-year performance. We do not believe this is a structural issue with the business or our strategy. Rather, we believe the shortfall reflected three main factors: elevated competitive pressure affecting selling prices, higher energy costs related to Middle East conflict, and unanticipated operational inefficiencies following restructuring across multiple EU plants along with two furnace events.

Speaker #3: Second quarter net sales were stable, while adjusted earnings were 9 cents per share compared with 53 cents per share last year. Performance varied significantly by region.

Speaker #3: Strong Americas result helped offset substantially lower earnings in Europe, while an unusually high adjusted tax rate reduced results by 18 cents per share. In the Americas, segment operating profit increased 22% year over year, which we believe demonstrates strong execution of our strategy and the resilience of the business, even with one furnace event during the quarter.

Speaker #3: We believe these issues are largely transitional and should improve as market conditions recover and we work through the remaining restructuring challenges.

Speaker #3: Europe was significantly below our expectations and prior year performance. We do not believe this is a structural issue with the business or our strategy.

Speaker #3: Rather, we believe the shortfall reflected three main factors: (1) elevated competitive pressure affecting selling prices, (2) higher energy costs related to the Middle East conflict, and (3) unanticipated operational inefficiencies following restructuring across multiple EU plants along with two furnace events.

Speaker #3: We believe these issues are largely transitional and should improve as market conditions recover and we work through the remaining restructuring challenges. Global demand was also softer than expected, with shipments down approximately 4.5% year over year.

Speaker #3: However, trends improved through the quarter and June volumes were flat with last year. Operational disruptions also limited sales opportunities and accounted for about half of that decline.

Speaker #3: We believe fit-to-win remains a key driver of value creation. We have delivered significant savings year to date despite operational disruption and inefficiencies. In light of these near-term challenges, we have adjusted our 2026 fit-to-win target while our 3-year target is now in line with our original expectations of 650 million.

Speaker #1: We are currently troubleshooting with internal the internal sorry, folks. We're just troubleshooting the speaker. Give us one moment. Thank you.

Speaker #3: Given these factors, we have updated our 2026 guidance and recalibrated our 2027 targets from last year's investor day. Importantly, we believe firmly in our strategy.

Speaker #2: Gabby, do you have us now?

Speaker #3: We are realigning the timing to achieve our goals, not changing the strategy. Let's now discuss the top line on slide 4. Net sales remain relatively stable in the quarter.

Speaker #1: No, you haven't.

Speaker #2: Okay. Gabby, do you have us?

Speaker #1: Yes, we have you. Go ahead.

Speaker #2: Okay. Put us back on to the main line.

Speaker #3: Volume performance continued to reflect soft demand, although trends improved as the quarter progressed. As noted, global shipments declined approximately 4.5% year on year, while June volumes were flat with last year.

Speaker #1: Doing that now.

Speaker #3: Recovery has been difficult to predict, given sluggish consumer demand and customer destocking in certain markets. In the Americas, shipments were down 7%, reflecting challenging prior year comparisons exiting some unprofitable business and a furnace event that limited sales opportunities.

Speaker #3: In Europe, shipments declined 2%, primarily due to operational disruption that constrained sales. Excluding that impact, underlying trends were roughly flat in Europe. We continue to see pockets of strength across the portfolio.

Speaker #3: Non-alcoholic containers remain a standout performer, and several geographies exceeded local market trends in prior year levels. The Andean Group delivered double-digit growth, while Brazil was up low single digits.

Speaker #3: In fact, we outperformed the market in the majority of category and market clusters amid generally sluggish demand. We continue to expect second-half growth supported by easier comparisons, and new business wins while maintaining a more cautious recovery outlook.

Speaker #2: Q4 is off?

Speaker #1: Yeah. They've completely disconnected us.

Speaker #2: Okay. Hold on.

Speaker #1: So we're off again.

Speaker #2: Yes. Okay. We're back. Okay. We're live.

Speaker #3: Our commercial transformation continues to gain traction. We are focused on business that generates economic profit and are applying greater discipline across the portfolio. Following strong execution in the Americas, we are starting to get more traction in Europe.

Speaker #3: Good morning again, everybody. I'll now comment on recent performance. Second quarter net sales were stable, while adjusted earnings were 9 cents per share compared with 53 cents per share last year.

Speaker #3: New business wins represent approximately 2% of annual sales volume, with contributions expected later this year. While the recovery remains gradual, improving momentum and portfolio optimization strengthen our confidence in delivering profitable growth.

Speaker #3: Let's now move to slide 5. Fit-to-win remains central to our strategy and continues to generate meaningful benefits. We believe the program is improving our cost position, strengthening our competitiveness, and building the foundation for long-term profitable growth.

Speaker #3: Europe was significantly below our expectations and prior-year performance. We do not believe this is a structural issue with the business or our strategy. Rather, we believe the shortfall reflected three main factors: one, elevated competitive pressure affecting selling prices; two, higher energy costs related to the Middle East conflict; and three, unanticipated operational inefficiencies following restructuring across multiple EU plants along with two furnace events.

Speaker #3: Since launch, fit-to-win has generated more than 400 million of net benefits. Through the first half of 2026, we delivered 85 million of benefits. This is net of 30 million of direct operating inefficiencies, and the total impact of disruption was approximately 45 million dollars, when including constraint opportunities and additional logistics costs.

Speaker #3: Phase A execution remains strong. Announced plan closures are complete, and we are advancing the final stages of organizational restructuring. Phase B continues to progress, although operational disruption has delayed TOE benefits.

Speaker #3: We are also advancing supply chain, procurement, and energy initiatives that should deliver increasing benefits over time. We have revised our 2026 and 2027 targets to reflect the headwinds discussed today.

Speaker #3: We now expect approximately 200 million of fit-to-win savings in 2026 and at least 650 million over the 3-year period. Importantly, this reflects timing and execution disruption.

Speaker #3: We believe fit-to-win remains a key driver of value creation. We have delivered despite operational disruption and inefficiencies. In light of these near-term challenges, we have adjusted our 2026 fit-to-win target while our three-year target is now in line with our original expectations of 650 million.

Speaker #3: Not a change in underlying opportunity. The Americas performance and recent customer wins are encouraging signs of improved competitiveness through fit-to-win. As execution stabilizes, we believe this can deliver meaningful value over time.

Speaker #3: Given these factors, we have updated our 2026 guidance and recalibrated our 2027 targets from last year's investor day. Importantly, we believe firmly in our strategy.

Speaker #3: With that, I'll now turn it over to John on slide 6.

Speaker #2: Thanks, Gordon. Good and good morning, everyone. The top line was fairly stable while second quarter results were below our expectation, given challenges in Europe.

Speaker #3: We are realigning the timing to achieve our goals not changing the strategy. Let's now discuss the top line on slide 4. Net sales remain relatively stable in the quarter, volume performance continue to reflect soft demand, although trends improved as the quarter progressed.

Speaker #2: Net sales were nearly 1.7 billion dollars, down about 2% from the prior year. Favorable currency and stable consolidated selling prices partially offset lower sales volumes.

Speaker #3: As noted, global shipments declined approximately 4.5% year on year, while June volumes were flat with last year. Recovery has been difficult to predict, given sluggish consumer demand and customer destocking in certain markets.

Speaker #2: Adjusted earnings were 9 cents per share compared with 53 cents last year. Lower net price was the primary headwind. Selling prices increased in the Americas, but declined in Europe, amid competitive pressure.

Speaker #2: Europe was also impacted by higher energy costs related to the Middle East conflict and the one-time reset we have discussed previously. Lower sales volume was offset by favorable operating costs.

Speaker #3: In the Americas, shipments were down 7%, reflecting challenging prior-year comparisons exiting some unprofitable business and a furnace event that limited sales opportunities. In Europe, shipments declined 2%, primarily due to operational disruption that constrained sales.

Speaker #2: Reflecting fit-to-win benefits, net of unanticipated costs tied to operating inefficiencies and furnace events. Adjusted earnings also reflect an unusually high adjusted tax rate driven by lower European earnings and a reduced full-year outlook.

Speaker #3: Excluding that impact, underlying trends were roughly flat in Europe. We continue to see pockets of strength across the portfolio. Non-alcoholic containers remain a standout performer and several geographies exceeded local market trends in prior-year levels.

Speaker #2: We also recorded a significant non-cash goodwill impairment charge and increased tax valuation allowances. Both are excluded from adjusted earnings. The impairment was triggered by the decline in the company share price during the quarter and reflects Europe's current challenges from an accounting perspective.

Speaker #3: The Andean Group delivered double-digit growth while Brazil was up low single digits. In fact, we outperformed the market in the majority of category and market clusters amid generally sluggish demand.

Speaker #2: These charges do not affect cash flow, operating plans, or fit-to-win milestones. Our priority is to bring the same discipline and execution to Europe that have improved performance in the Americas, while recognizing that progress is taking longer than expected in a tough macro environment.

Speaker #3: We continue to expect second-half growth supported by easier comparisons and new business wins while maintaining a more cautious recovery outlook. Our commercial transformation continues to gain traction.

Speaker #2: Regarding the balance sheet, leverage is up some given lower EBITDA. However, liquidity is very good at 1.5 billion dollars. We have no maturities until 2028, and we have ample headroom on our senior security covenant.

Speaker #3: We are focused on business that generates economic profit and are applying greater discipline across the portfolio. Following strong execution in the Americas, we are starting to get more traction in Europe.

Speaker #2: Let's turn to slide 7. Segment operating profit was 171 million dollars, compared to 225 million dollars in the prior year. As strong performance in the Americas was more than offset by continued pressure in Europe.

Speaker #2: In the Americas, net sales were 949 million dollars, up about 1%. Higher selling prices and favorable currency more than offset a 7% decline in volumes.

Speaker #2: Segment operating profit increased 22% to 165 million dollars in margins expanded by around 300 basis points to 17.4%. Higher net price favorable FX and operating costs net of a furnace event more than offset lower volumes.

Speaker #3: Since launch, fit-to-win has generated more than 400 million of net benefits. Through the first half of 2026, we delivered 85 million of benefits. This is net of 30 million of direct operating inefficiencies and the total impact of disruption was approximately 45 million dollars, when including constraint opportunities and additional logistics costs.

Speaker #2: This represents the highest second quarter profit in the Americas over the past 10 years, and demonstrates the value of fit-to-win. In Europe, net sales were 704 million dollars, down 5%, with shipments down 2% as disruption-limited sales opportunities.

Speaker #2: Segment operating profit was 6 million dollars, compared to 90 million dollars last year. The decline primarily reflected unfavorable net price from competitive pressures and higher energy costs.

Speaker #3: Phase A execution remains strong. Announced plan closures are complete and we are advancing the final stages of organizational restructuring. Phase B continues to progress, although operational disruption has delayed TOE benefits.

Speaker #2: Europe delivered solid gross fit-to-win benefits, but temporary operational disruption and inefficiencies prevented those benefits from translating into net savings. Let's turn to slide 8.

Speaker #2: We are revising our full-year 2026 guidance to reflect the second quarter shortfall and a more measured pace of improvement in Europe. Please note that we have removed adjusted earnings guidance because the effective tax rate is highly sensitive to changes in operating earnings, particularly given the low level of anticipated earnings in Europe.

Speaker #3: We now expect approximately 200 million of fit-to-win savings in 2026 and at least 650 million over the three-year period. Importantly, this reflects timing and execution disruption.

Speaker #2: We now expect adjusted EBITDA of 1.0 to 1.1 billion dollars, with updated free cash flow and leverage guidance included on the chart. We continue to anticipate strong performance in the America, with results expected to be up nearly 60% in 2026 versus 2024.

Speaker #2: As Gordon noted, lower current-year guidance is primarily driven by three factors in Europe. Continued market challenges, including additional price pressure and higher energy costs related to the Middle East conflict, adjusted fit-to-win timing due to temporary operational disruption, and additional costs at a few specific plants.

Speaker #3: With that, I'll now turn it over to John on slide 6.

Speaker #1: Thanks, Gordon. Good and good morning, everyone. The top line was fairly stable while second quarter results were below our expectation, given challenges in 1.7 billion dollars, down about 2% from the prior year.

Speaker #2: We believe the revised outlook better reflects current operating conditions and the environment we expect through the balance of the year. Importantly, we believe performance in Europe should improve sequentially over the second half.

Speaker #1: Favorable currency and stable consolidated selling prices partially offset lower sales volumes. Adjusted earnings were 9 cents per share compared with 53 cents last year.

Speaker #2: Let's turn to slide 9. We are also realigning our 2027 targets to reflect the same factors affecting our 2026 outlook. We now expect adjusted EBITDA of 1.2 to 1.3 billion dollars in 2027, reflecting a more gradual improvement path in Europe.

Speaker #1: Lower net price was the primary headwind. Selling prices increased in the Americas, but declined in Europe, amid competitive pressure. Europe was also impacted by higher energy costs related to the Middle East conflict and the one-time reset we have discussed previously.

Speaker #2: From our revised 2026 guidance, 2027 should benefit from at least 150 million dollars of additional fit-to-win savings. Potential upside could come from market improvement in Europe, and energy price normalization following an eventual resolution of the Middle East conflict.

Speaker #1: Lower sales volume was offset by favorable operating costs. Reflecting fit-to-win benefits, net of unanticipated costs tied to operating inefficiencies and furnace events. Adjusted earnings also reflect an unusually high adjusted tax rate, driven by lower European earnings and a reduced full-year outlook.

Speaker #2: Importantly, we remain committed to the original adjusted EBITDA target of 1.45 billion dollars. We continue to believe that target is achievable, but it will likely take longer than originally anticipated.

Speaker #1: We also recorded a significant non-cash goodwill impairment charge and increased tax valuation allowances. Both are excluded from adjusted earnings. The impairment was triggered by the decline in the company share price during the quarter and reflects Europe's current challenges from an accounting perspective.

Speaker #2: With that, I'll turn it back to Gordon on slide 10.

Speaker #1: Thanks, John. Before we close, I want to reinforce several key points. We are not satisfied with our performance. We understand that investors will expect clear, evidence of improvement.

Speaker #1: These charges do not affect cash flow, operating plans, or fit-to-win milestones. Our priority is to bring the same discipline and execution to Europe that have improved performance in the Americas, while recognizing that progress is taking longer than expected in a tough macro environment.

Speaker #1: At the same time, the framework we laid out around fit-to-win profitable growth and strategic optionality remains the right path to create long-term value. In Horizon One, fit-to-win is delivering meaningful savings and improving our competitive position.

Speaker #1: Regarding the balance sheet, leverage is up some given lower EBITDA. However, liquidity is very good at 1.5 billion dollars. We have no maturities until 2028, and we have ample headroom on our senior security covenant.

Speaker #1: The Americas demonstrate the earnings potential of stronger execution. Europe is about a year behind the Americas on fit-to-win. Ultimately, we believe Europe should improve to mid-teen segment profit margins within the next two years.

Speaker #1: Let's turn to slide 7. Segment operating profit was 171 million dollars, compared to 225 million dollars in the prior year. As strong performance in the Americas was more than offset by continued pressure in Europe.

Speaker #1: This should be achieved through initiating recovery of excess cost inflation, addressing temporary disruption, and normalizing energy market, and completing our fit-to-win implementation. In Horizon Two, improved competitiveness is supporting profitable growth with new business opportunities, expected to build volume momentum through the second half of 2026 and into 2027.

Speaker #1: In the Americas, net sales were 949 million dollars, up about 1%. Higher selling prices and favorable currency more than offset a 7% decline in volumes.

Speaker #1: Segment operating profit increased 22% to 165 million dollars in margins expanded by around 300 basis points to 17.4%. Higher net price favorable FX and operating costs net of a furnace event more than offset lower volumes.

Speaker #1: In Horizon Three, we are evaluating strategic options to strengthen the portfolio, improve our position in the value chain, and preserve flexibility for long-term value creation.

Speaker #1: In short, we are addressing near-term challenges with urgency, while staying focused on the strategy we believe will create sustainable long-term value. With that, let me conclude on the next slide.

Speaker #1: This represents the highest second quarter profit in the Americas over the past 10 years and demonstrates the value of fit-to-win. In Europe, net sales were 704 million dollars, down 5%, with shipments down 2% as disruption-limited sales opportunities.

Speaker #1: To close, second quarter results were below expectations, primarily due to Europe. We understand the drivers and are addressing them directly, and with urgency. At the same time, the Americas performance highlights the earning potential of effective executing our strategy.

Speaker #1: Segment operating profit was 6 million dollars, compared to 90 million dollars last year. The decline primarily reflected unfavorable net price from competitive pressures and higher energy costs.

Speaker #1: Europe delivered solid gross fit-to-win benefits, but temporary operational disruption and inefficiencies prevented those benefits from translating into net savings. Let's turn to slide 8.

Speaker #1: Demand remains soft, but volume trends improved through the quarter, and we expect gradual improvement in the second half. Fit-to-win continues to deliver meaningful value, even with near-term disruption.

Speaker #1: We are revising our full year 2026 guidance to reflect the second quarter shortfall and a more measured pace of improvement in Europe. Please note that we have removed adjusted earnings guidance because the effective tax rate is highly sensitive to changes in operating earnings, particularly given the low level of anticipated earnings in Europe.

Speaker #1: Most importantly, our strategy remains intact. We are recalibrating timing, not changing direction. Our focus is clear: restore performance in Europe, improve execution, and create sustainable long-term value.

Speaker #1: We now expect adjusted EBITDA of 1.0 to 1.1 billion dollars, with updated free cash flow and leverage guidance included on the chart. We continue to anticipate strong performance in the America, with results expected to be up nearly 60% in 2026 versus 2024.

Speaker #1: Thank you for your time this morning. We will now take your questions.

Speaker #3: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand.

Speaker #1: As Gordon noted, lower current year guidance is primarily driven by three factors in Europe. Continued market challenges, including additional price pressure and higher energy costs related to the Middle East conflict, adjusted fit-to-win timing due to temporary operational disruption, and additional costs at a few specific plants.

Speaker #3: To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #3: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. The first question comes from the line of Gancham Punjabi, with Baird.

Speaker #1: We believe the revised outlook better reflects current operating conditions and the environment we expect through the balance of the year. Importantly, we believe performance in Europe should improve sequentially over the second half.

Speaker #1: Let's turn to slide 9. We are also realigning our 2027 targets to reflect the same factors affecting our 2026 outlook. We now expect adjusted EBITDA of 1.2 to 1.3 billion dollars in 2027, reflecting a more gradual improvement path in Europe.

Speaker #3: Your line is now open. Please go ahead.

Speaker #2: Hi, Gordon and John. This is William Katz on for Gancham. I think my first question is just, what gives you confidence on 2027's plan?

Speaker #2: Obviously, 2026 has shut out meetings with below your initial expectations. So just some more color on 2027 would be great. And then I have a follow-up.

Speaker #1: From our revised 2026 guidance, 2027 should benefit from at least 150 million dollars of additional fit-to-win savings, potential upside could come from market improvement in Europe, and energy price normalization following an eventual resolution of the Middle East conflict.

Speaker #3: Thanks.

Speaker #2: Yeah, I'll take that first. And when we talk about moving from 2026 to 2027, first of all, we've obviously rebased 2026 for the factors that we talked about.

Speaker #2: As we look going forward, we are highly confident of the 150 million-plus of fit-to-win benefits. We're going to, even in a disrupted environment, we're going to generate 200 million dollars or more this year.

Speaker #1: Importantly, we remain committed to the original adjusted EBITDA target of 1.45 billion dollars. We continue to believe that target is achievable, but it will likely take longer than originally anticipated.

Speaker #2: So we're confident, especially as we get through the disruption elements and the benefit of exiting from some one-time elements into the next year. Beyond that, we're really not making a lot of forward estimates about strong recovery.

Speaker #1: With that, I'll turn it back to Gordon on slide 10.

Speaker #2: Thanks, John. Before we close, I want to reinforce several key points. We are not satisfied with our performance. We understand that investors will expect clear evidence of improvement.

Speaker #2: We still have included in there kind of a flatish volume environment. We still have the baseline of the Middle East conflict, sluggish demand, affordability issues, all things.

Speaker #2: At the same time, the framework we laid out around fit-to-win profitable growth and strategic optionality remains the right path to create long-term value. In Horizon One, fit-to-win is delivering meaningful savings and improving our competitive position.

Speaker #2: With that said, there are probably more upside opportunities with ultimately the resolution of the war and the normalization of the energy markets, as well as with a better background in that regard, affordability elements, consumer consumption, and not to mention us putting into effect our Horizon Two profitable growth and the forward opportunities that we have on a number of the new wins that we have and the new businesses that Gordon mentioned.

Speaker #2: The Americas demonstrate the earnings potential of stronger execution. Europe is about a year behind the Americas on fit-to-win. Ultimately, we believe Europe should improve to mid-teen segment profit margins within the next two years.

Speaker #2: This should be achieved through initiating recovery of excess cost inflation, addressing temporary disruption, and normalizing energy market, and completing our fit-to-win implementation. In Horizon Two, improved competitiveness is supporting profitable growth with new business opportunities, expected to build volume momentum through the second into 2027.

Speaker #2: So those underpin our view of 2027, which of course has been rebased from the original expectation.

Speaker #1: And as just to build on that, William, we see what we can deliver in the Americas with the tight execution of the strategy and fit-to-win.

Speaker #2: In Horizon Three, we are evaluating strategic options to strengthen the portfolio, improve our position in the value chain, and preserve flexibility for long-term value creation.

Speaker #1: As we've said on previous calls and here again today, Europe is about a year behind the fit-to-win implementation. And so we expect that to improve sequentially through the next four to six quarters.

Speaker #2: In short, we are addressing near-term challenges with urgency, while staying focused on the strategy we believe will create sustainable long-term value. With that, let me conclude on the next half of 2026 and slide.

Speaker #1: And that also is an underpinning of our thinking around our 2027 results.

Speaker #2: Okay, great. That's super helpful. Thank you. And then just one more on volume expectations for the back half of the year. How much would that be contracted new business versus just the general expectation of a market recovery?

Speaker #2: To Most importantly, our strategy remains intact, we are recalibrating timing, not changing direction. Our focus is clear: restore performance in Europe, improve execution, and create sustainable long-term value.

Speaker #2: close, second quarter results were below expectations, primarily due to Europe. We understand the drivers and are addressing them directly, and with urgency. At the same time, the Americas performance highlights the earning potential of effective executing our strategy.

Speaker #2: I know you said June was flat, but if we could just hear that and maybe how July is shaking out too, that'd be great.

Speaker #2: Thanks.

Speaker #1: Sure. So as we've outlined, we rejigged and reconfigured our go-to-market approach in both the Americas and in Europe. And we're seeing the early benefits of that coming through.

Speaker #2: remains soft, but volume trends improved through the quarter, and we expect gradual improvement in the second half. Fit-to-win continues to deliver meaningful value, even with near-term disruption.

Speaker #1: I think last time or last outing, we mentioned we had picked up 15 pieces of new business that equated to about one, one and a half percent of volume.

Speaker #1: We've subsequently picked up more business that will start to flow in the back half of this year. And into next year, which represents about 2% of volume.

Speaker #2: Thank you for your time this morning. We will now take your questions.

Speaker #1: So we're gaining traction. We're becoming more competitive in the market. We when we look at it, we see it sequentially improving through this quarter.

Speaker #3: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please

Speaker #3: To withdraw your question, press star one again. We ask that you pick up your handset when asking a Demand question to allow for optimum sound quality.

Speaker #1: And into the fourth quarter. So all the early signs are positive. That we're becoming more competitive, and we're translating that competitive into profitable volume growth.

Speaker #2: I'll add just a couple of data points on there, William. The new contracted business, as far as what we expect, it's going to ramp up in the second half of the year.

Speaker #2: It probably adds something like one to one and a half percent annualized run rate in the back half of the year, as we then build into 2027 when you see the full 2% being realized.

Speaker #3: Your line is now open. Please go ahead.

Speaker #1: Hi, Gordon and John. This is William Katz on for Gancham. I think my first question is just, what gives you confidence on 2027's plan?

Speaker #2: So that comes as a tailwind. And then to your question on July, basically all of our markets are performing kind of in line with what we saw in June net-net in total.

Speaker #1: Obviously, 2026 has shut out meaningfully below your initial expectations. So just some more color on 2027 would be great. And then I have a follow-up.

Speaker #1: Yeah, I'll take that first. And when we talk about moving from 2026 to 2027, first of all, we've obviously rebased 2026 for the factors that we talked about.

Speaker #2: The one thing that we got to say is that there's still a little in one geography, we are still dealing with a little bit of transitional elements of one of the furnace events that we had.

Speaker #2: So there was still a little bit of headway on volumes due to the ability to supply. But through July, we believe that we're out of that.

Speaker #1: As we look going forward, we are highly confident of the 150 million plus of fit-to-win benefits. We're going to, even in a disrupted environment, we're going to generate 200 million dollars or more this year.

Speaker #2: And then going forward, we should see the trends fall through to the full market opportunity.

Speaker #1: So we're confident, especially as we get through the disruption elements and the benefit of exiting from some one-time elements into the next year. Beyond that, we're really not making a lot of forward estimates about strong recovery.

Speaker #1: Okay, great, great. That's super helpful. Thanks, guys.

Speaker #3: Your next question is from Mike Roxland, with Truist Securities. Go ahead. Your line is now open.

Speaker #1: We still have included in there kind of a flattish volume environment. We still have the baseline of the Middle East conflict, issues, all things.

Speaker #4: Yeah, thank you, Gordon and John and Chris for taking my questions.

Speaker #1: Good morning, Mike.

Speaker #4: Good morning. Just wanted to follow up to provide some more color on those operational efficiencies along with the two furnace events. In Europe, more color around what they are, what disruptions were, when they started to occur, and what your plan has been to get them fixed and where that plan currently stands.

Speaker #1: With that said, there are probably more upside opportunities with ultimately the resolution of the war and the normalization of the energy markets, as well as with a better background in that regard, affordability elements, consumer consumption, and not to mention us putting into effect our Horizon Two profitable growth and the forward opportunities that we have on a number of the new wins that we have and the new businesses that Gordon mentioned.

Speaker #4: Thank you.

Speaker #1: Yeah. So the events took place in Europe, one in France, one in the UK. One was a fire, one was a leak. And that caused us to short-ship into the market.

Speaker #1: So those underpin our view of 2027, which of course has been rebased from the original expectation.

Speaker #1: And put extra pressure on the network in the context of a changing network that hadn't yet settled. And also in the context of increasing logistics costs.

Speaker #2: And as just to build on that, William, we see what we can deliver in the Americas with the tight execution of the strategy and fit-to-win.

Speaker #1: What have we done about it? We've got both local engineering and expert furnace engineers that were in place, supported by some outside expertise to fix those issues.

Speaker #2: As we've said on previous calls and here again today, Europe is about a year behind the fit-to-win implementation. And so we expect that to improve sequentially through the next four to six quarters and that also is an underpinning of our thinking around our 2027 results.

Speaker #1: We're confident that those issues are now fixed. And those both those plants are starting to resupply the market at getting up to what their full potential supply should be as we work through July.

Speaker #1: Okay, great. That's super helpful. Thank you. And then just one more on volume expectations for the back half of the year. How much would that be contracted new business versus just the general expectation of a market recovery?

Speaker #1: They were the main issues. But when you're changing the supply network as we were with three plant closures in the first and second quarter, that disruption did add pressure into the network.

Speaker #1: I know you said June was flat, but if we could just hear that and maybe how July is shaking out too, that'd be great.

Speaker #1: Thanks.

Speaker #2: Sure. So as we've outlined we rejigged and reconfigured our go-to-market approach in both the Americas and in Europe. And we're seeing the early benefits of that coming through.

Speaker #1: At a time when as I said, costs were rising, there was less available logistics capacity that caused us to have to pay more for what was available.

Speaker #2: I think last time or last outing we mentioned we had picked up 15 pieces of new business that equates to about 1, 1.5 percent of volume.

Speaker #1: So that was that really was the root cause of that. We did also experience kind of a number of small one-time events around rail transport not being available in France.

Speaker #2: We've subsequently picked up more business that will start to flow in the back half of this year. And into next year, which represents about 2 percent of volume.

Speaker #1: And having to shift to road freight. That also caused us a bit of disruption and certainly put a significant chunk of cost. Again, that's a once-off.

Speaker #2: So we're gaining traction. We're becoming more competitive in the market. We when we look at it, we see it sequentially improving through this quarter.

Speaker #1: And we don't see that reoccurring as we go through the back half of the year.

Speaker #2: You know, maybe just one other comment, Mike, on top of that, just to show compare that to the Americas where we did have a furnace event and the segment was able to fully offset it and deliver it just shows the resilience in the business that once you do get through all the restructuring and activities and then you get the TOE and the operations where you want it to be, we're confident that while this is a blip that occurred because of the combination of the furnace events and the closing the three factories at one time, we believe that we'll get out of that into a much more stable environment.

Speaker #2: And into the fourth quarter. So all the early signs are positive. That we're becoming more competitive, and we're translating that competitive into profitable volume growth.

Speaker #1: I'll add just a couple of data points on there, William. The new contracted business, as far as what we expect, it's going to ramp up in the second half of the year.

Speaker #1: It probably adds something like 1 to 1.5 percent annualized run rate in the back half of the year, as we then build into 2027 when you see the full 2 percent being realized.

Speaker #1: So that comes as a tailwind. And then to your question on July, basically all of our markets are performing kind of in line with what we saw in June net-net in total.

Speaker #4: Got it. So to put a ball, I mean, your passage events now, though, they're in the rearview mirror. Everything's been corrected and you should be operating better today than in Q2.

Speaker #1: The one thing that we got to say is that there's still a little in one geography, we are still dealing with a little bit of transitional elements of one of the furnace events that we had.

Speaker #1: Yes, absolutely. We're past those events. The rest of the fleet in Europe is performing well. And we expect the that performance to sequentially improve through the next four quarters as we embed the TOE, the total operating efficiency, methodologies into the plant at the same level we have embedded them into the US.

Speaker #1: So there was still a little bit of headway on volumes due to the ability to supply. But through July, we believe that we're out of that.

Speaker #1: And then going forward, we should see the trends fall through to the full market opportunity.

Speaker #1: As I said, Europe is about a year behind the implementation of fit-to-win. And we expect the catch-up to occur or is occurring as we speak.

Speaker #2: Okay, great. Great. That's super helpful. Thanks, guys.

Speaker #3: Your next question is from Mike Roxland, with Truist Securities. Go ahead. Your line is now open.

Speaker #1: Yeah.

Speaker #4: Got it. And then just one quick follow-up. You mentioned Gordon that you don't believe that the what you're seeing in Europe is structural. What gives you the confidence that it's really not a structural issue in Europe?

Speaker #4: Yeah, thank you, Gordon and John, Chris, for taking my questions.

Speaker #2: Good morning, Mike.

Speaker #4: And what I'm trying to get is when I look at some of your peers that recently reported, one of your peers reported close to a 30% EBITDA margin in the first half.

Speaker #4: So there obviously are benefits to be had in the European market. It seems like you guys are a little bit behind that, notably behind that.

Speaker #4: Thank you.

Speaker #2: Yeah. So the events took place in Europe, one in France, one in the UK. One was a fire, one was a leak. And that caused us to short-ship into the market.

Speaker #4: So what are you trying to do to maybe catch up from a portfolio perspective, from an earnings and margin perspective, to what some of your peers have been posting in terms of their earnings and their margins?

Speaker #2: And put extra pressure on the network in the context of a changing network that hadn't yet settled. And also in the context of increasing logistics costs.

Speaker #4: Thank you.

Speaker #1: Okay. First of all, let me just give some context around Europe. It's a very large market, very attractive market. 22 million tons and over two and a half billion dollars of profit pool in the region.

Speaker #2: What we've done about it, we've got both local engineering and expert furnace engineers that were in place supported by some outside expertise to fix those issues.

Speaker #1: Our peers are running businesses that are not going through a restructuring as we are in Europe. I come back to our original thesis. The business was uncompetitive.

Speaker #2: We're confident that those issues are now fixed. And those both those plants are starting to resupply the market at getting up to what their full potential supply should be as we work through July.

Speaker #1: And we are going through the actions required to get this business more competitive in Europe. So we're in transition, right? And executing that, yes, we've had a stumble chunk of it of our own making.

Speaker #2: They were the main issues. But when you're changing the supply network as we were with three plant closures in the first and second quarter, that disruption did add pressure into the network at a time when as I said, costs were rising.

Speaker #1: We own that. We know how to fix it. We know what the issues are. We have the right resources in place. We've made the required changes of leadership and have no leadership in place with the skills that can address the supply chain network issues that we're facing.

Speaker #1: So we see ourselves being able to execute that in the months and quarters ahead to the standard that we've done it in the Americas.

Speaker #2: There was less available logistics capacity that caused us to have to pay more for what was available. So that was that really was the root cause of that.

Speaker #1: And we have the right resources and governance around that. We expect within two years to be back at kind of high teens margins. And that's assuming energy markets somewhat normalize, there's some demand coming back into the market in certain categories.

Speaker #2: We did also experience kind of a number of small one-time events around rail transport not being available in France. And having to shift to road freight.

Speaker #2: That also caused us a bit of disruption and certainly put a significant chunk of cost. Again, that's a once-off. And we don't see that reoccurring as we go through the back half of the year.

Speaker #1: But we don't need nor do we expect huge lifts in demand. But we have a clear plan. Around our fit-to-win, running the operations and the supply chain in as fit a manner as we are now running it in the Americas.

Speaker #1: You know, maybe just one other comment, Mike, on top of that, just to show compare that to the Americas where we did have a furnace event and the segment was able to fully offset it and deliver it.

Speaker #1: We've also upgraded substantially our energy procurement, our energy risk management, and our energy usage capabilities in all these plants. And we expect those benefits to flow through in the coming quarters.

Speaker #1: Just shows the resilience in the business that once you do get through all the restructuring and activities and then you get the TOE and the operations where you want it to be, we're confident that while this is a blip that occurred because of the combination of the furnace events and the closing the three factories at one time, we believe that we'll get out of that into a much more stable environment.

Speaker #1: And to give you a data point on that, in terms of energy usage, we've put in a new system across all of the plants and some of our plants in Europe are now generating savings of anywhere between 5 and 7 percent year on year in energy usage.

Speaker #4: Got it. So to put a bone, I mean, your passage events now, though, they're in the rearview mirror. Everything's been corrected and you should be operating better today than in Q2.

Speaker #1: So there's a lot of good things happening in Europe. We're making a lot of progress in a lot of areas. But we did have this stumble that is sort of masking that.

Speaker #2: Yes, absolutely. We're past those events. The rest of the fleet in Europe is performing well. And we expect the that performance to sequentially improve through the next four quarters as we embed the TOE, the total operating efficiency, methodologies into the plant at the same level we have embedded them into the US.

Speaker #1: We feel we're working through that. But year end, we'll have settled the supply chain significantly and we'll start to extract the full value of the restructuring and the capacity optimization.

Speaker #1: So we have a lot of data points we feel gives us confidence that we can execute in a way that delivers into the high teens over the next 18, 24 months.

Speaker #2: As I said, Europe is about a year behind the implementation of Fit to Win. And we expect the catch-up to occur is occurring as we speak.

Speaker #4: Got it. Thank you.

Speaker #2: Yeah.

Speaker #3: Your next question comes from Aaron Viswanathan, with RBC Capital Markets.

Speaker #4: Hey, Aaron.

Speaker #2: Aaron. I hope you guys are well. I just wanted to ask about Europe. And I think you went into the quarter expecting a slight improvement there, but then I think you were down slightly.

Speaker #4: And what I'm trying to get is when I look at some of your peers that recently reported, one of your peers reported close to a 30% EBITDA margin in the first half.

Speaker #4: So there obviously are benefits to be had in the European market. It seems like you guys are a little bit behind that or notably behind that.

Speaker #2: So what kind of drove that? And would you say that there's some structural weakness in wine? Do you think this is more transitory in nature?

Speaker #4: So what are you trying to do to maybe catch up from a portfolio perspective, from an earnings and market perspective, to what some of your peers have been posting in terms of their earnings and their margins?

Speaker #2: I know the affordability issues have continued to linger. And obviously, we've had the conflict going on as well. But how do we kind of see volumes kind of improving?

Speaker #4: Thank you.

Speaker #2: Okay. First of all, let me just give some context around Europe. It's a very large market, very attractive market. 22 million tons and over two and a half billion dollars of profit pool in the region.

Speaker #2: Is there anything else under your control? Whether it be business wins or anything else that you could do to potentially drive some of that volume?

Speaker #2: And if it does not improve, what kind of footprint optimization actions would you be in a position to take? Thanks.

Speaker #2: Our peers are running businesses that are not going through a restructuring as we are in Europe. I come back to our original thesis. The business was uncompetitive.

Speaker #4: Hey, Aaron. This is John. I'll just kick that off. For clarity, during the quarter, we expected Europe's performance would be about 25 million dollars better than where it was.

Speaker #4: Okay? The majority, about 80% of that had to do with the operating disruption, one way or another. Okay? The other maybe 5 million dollars was a little bit of extra pricing pressure.

Speaker #2: And we are going through the actions required to get this business more competitive in Europe. So we're in transition, right? And executing that, yes, we've had a stumble chunk of it of our own making.

Speaker #4: But keep in mind as we indicated, our volumes are down 2%, but they were flat. If it wasn't for the disruption. So we didn't really have a meaningful commercial difference in the environment.

Speaker #2: We own that. We know how to fix it. We know what the issues are. We have the right resources in place. We've made the required changes of leadership and have no leadership in place with the skills that can address the supply chain network issues that we're facing.

Speaker #4: It was more of an operating element. But I'll turn it over to Gordon.

Speaker #1: Yeah. So Aaron, as I said, large market, over 22 million tons, and a very large profit pool. But one way to maybe look at Europe is, and this is broad strokes, but bear with me, if you look at Northern Europe, it tends to be spirits dominated.

Speaker #2: So we see ourselves being able to execute that in the months and quarters ahead. To the standard that we've done it in the Americas.

Speaker #2: And we have the right resources and governance around that. We expect within two years to be back at kind of high teens margins. And that's assuming energy markets somewhat normalize.

Speaker #1: Yeah? Spirits and food. If you look at kind of middle Europe, so across Northern France, Benelux, into Germany and Poland, is very much beer and food.

Speaker #1: And then in Southern Europe, much more kind of wine dominated, but obviously with some beer. What we're seeing is wine in all markets, not just in Europe, but across the world, is under significant pressure.

Speaker #2: There's some demand coming back into the market in certain categories. But we don't need nor do we expect huge lifts in demand. But we have a clear plan.

Speaker #1: And we do think there are some structural issues in that category. We've taken what we feel are appropriate network optimization actions and that to make sure that our footprint mirrors what we feel we can supply at an economic profit.

Speaker #2: Around our Fit to Win, running the operations and the supply chain in as fit a manner as we are now running it in the Americas.

Speaker #2: We've also upgraded substantially our energy procurement, our energy risk management, and our energy usage capabilities in all these plants. And we expect those benefits to flow through in the coming quarters.

Speaker #1: Yeah? In spirits, I think we're spirits generally are under pressure because of two largest markets, North America and China, have been underperforming for some years now.

Speaker #2: And to give you a data point on that, in terms of energy usage, we've put in a new system across all of the plants and some of our plants in Europe are now generating savings of anywhere between 5 and 7 percent year on year in energy usage.

Speaker #1: We see over the next probably 12 months not a huge change in that picture in terms of exports particularly into the US or China.

Speaker #1: Although we are an expect to see stocks decline in the US market and maybe some refill happening as we go through early mid-2027. The bright side on spirits is travel, retail continues to grow, tends to be more premium, maybe a bit less volume, but it is growing.

Speaker #2: So there's a lot of good things happening in Europe. We're making a lot of progress in a lot of areas. But we did have this stumble that is sort of masking that.

Speaker #2: We feel we're working through that. By year end, we'll have settled the supply chain significantly and we'll start to extract the full value of the restructuring and the capacity optimization.

Speaker #2: So we have a lot of data points we feel gives us confidence that we can execute in a way that delivers into the high teens over the next 18, 24 months.

Speaker #1: And then if you look at Europe, kind of what I call middle Europe, beer performs strongly. It's performing strongly, particularly premium beers as is food.

Speaker #1: We see in all markets our food business growing quite strongly, and it is now our second largest category with a strong economic profit. So as we look forward, we see pockets of growth that we can leverage.

Speaker #4: Got it. Thank you.

Speaker #3: Your next question comes from Aaron Viswanathan with RBC Capital Markets.

Speaker #4: Hey, Aaron.

Speaker #1: Aaron. I hope you guys are well. I just wanted to ask about Europe. And I think you went into the quarter expecting a slight improvement there, but then I think you were down slightly.

Speaker #1: And we've also tightened our network, our restructuring is behind us in Europe. And we see our platform probably moving into 95, 97 kind of capacity utilization as we move through the rest of the year and into 2027.

Speaker #1: So what kind of drove that? Would you say that there's some structural weakness in wine? Do you think this is more transitory in nature?

Speaker #1: Our go-to-market model, that we've instituted, is absolutely bearing results for us. We continually month on month see new business wins at margins that are attractive for us.

Speaker #1: I know the affordability issues have continued to linger and obviously we've had the conflict going on as well. But how do we kind of see volumes kind of improving?

Speaker #1: Is there anything else under your control? Whether it be business wins or anything else that you could do to potentially drive some of that volume?

Speaker #1: So you put all that together, we have a lot of confidence in the medium-long term market opportunities in Europe. We see our margins improving.

Speaker #1: And if it does not improve, what kind of footprint optimization actions would you be in a position to take? Thanks. Hey, Aaron. This is John.

Speaker #1: We know how to do that. We've demonstrated that in the Americas. We actually have pockets of Europe where we're executing very well, and we see the margins coming through, particularly in Southern Europe.

Speaker #1: I'll just kick that off. For clarity, during the quarter, we expected Europe's performance would be about 25 million dollars better than where it was.

Speaker #1: So you put all that together, we're bullish on Europe over the medium-longer term. There's we've got to execute more effectively on some of the basics around logistics and planning and get through this restructure.

Speaker #1: Okay? The majority, about 80% of that had to do with the operating disruption, one way or another. Okay? The other, maybe 5 million dollars, was a little bit of extra pricing pressure.

Speaker #1: But keep in mind, as we indicated, our volumes are down 2%, but they were flat. If it wasn't for the disruption. So we didn't really have a meaningful commercial difference in the environment.

Speaker #1: And then continue to execute our fit-to-win and our go-to-market. So that's really how we're thinking about Europe. Still a very important market, very attractive market, and a market we can do very well in the quarters ahead.

Speaker #1: It was more of an operating element. But I'll turn it over to Gordon.

Speaker #2: Yeah. So Aaron, as I said, large market, over 22 million tons, and a very large profit pool. But one way to maybe look at Europe is, and this is broad strokes, but bear with me, if you look at Northern Europe, it tends to be spirits dominated, yeah?

Speaker #2: Okay. Thanks for that. And then just as a quick follow-up, or not so quick, but I did want to ask about some broad strokes for '27.

Speaker #2: I think you mentioned that not calling for a big recovery, but how should we think about net price? And then obviously, the incremental fit-to-win benefits as well.

Speaker #2: Spirits and food. If you look at kind of middle Europe, so across Northern France, Benelux, into Germany, Poland, is very much beer and food.

Speaker #2: And would there be any other large bucket items you can kind of help us with to frame where you could see '27 EBITDA land versus the original 1.45 billion guidance that you provided previously?

Speaker #2: And then in Southern Europe, much more kind of wine dominated, but obviously with some beer. What we're seeing is wine in all markets, not just in Europe, but across the world, is under significant pressure.

Speaker #4: Yeah, Aaron. This is John. I can give you a little bit more color in that regard. As we look to 2027 and the levers there, from a net price standpoint, at this point in time, we're thinking kind of neutral-ish.

Speaker #2: And we do think there are some structural issues in that category. We've taken what we feel are appropriate network optimization actions and that to make sure that our footprint mirrors what we feel we can supply at an economic profit.

Speaker #4: So keep in mind we've had a very large amount of inflation this year and 55% of our business overall is covered under long-term agreements.

Speaker #2: Yeah? In spirits, I think we're spirits generally are under pressure because of two largest markets, North America and China, have been underperforming for some years now.

Speaker #4: So there'll be a PAF recovery it's typical in our business. There's a lag effect associated with that. So that will come through. Even in a world where we just assumed current elevated energy prices, the TTF at 55 to 60, we believe that we would have a neutral to even maybe modestly positive net price as we look forward.

Speaker #2: We see over the next probably 12 months not a huge change in that picture in terms of exports. Particularly into the US or China.

Speaker #4: That is that does not include any other actions that might occur. It doesn't include the potential of a resolution of the war. And in which case then energy prices could go down and that could be a bigger tailwind.

Speaker #2: Although we are an expect to see stocks decline in the US market and maybe some refill happening as we go through early mid-2027. The bright side on spirits is travel retail continues to grow.

Speaker #4: Okay? On a sales volume standpoint, we're penciling in kind of a continued mutus environment, but maybe flat to up 1% given that we do have 2% volume growth coming through.

Speaker #2: Tends to be more premium, maybe a bit less volume, but it is growing. And then if you look at Europe, kind of what I call middle Europe, beer performs strongly.

Speaker #4: And we will see that continues to build. And we will see what the net effect of that is overall. And then you have your 150 million dollars worth of plus of fit-to-win benefits, which are going to be substantially over it'll be skewed over to Europe as we work through the disruption this year.

Speaker #2: It's performing strongly, particularly premium beers. As is food. We see in all markets our food business growing quite strongly, and it is now our second largest category with a strong economic profit.

Speaker #4: And we complete the program, which is like we said, it's a little bit further along to go over Europe. Those are the big pieces.

Speaker #2: So as we look forward, we see pockets of growth that we can leverage. And we've also tightened our network, our restructuring is behind us in Europe.

Speaker #4: That kind of gets you to from your midpoint of the current year to the entry point of our guidance range of the 1.2 next year, with the upside being potential resolution of war and the tailwind there.

Speaker #2: And we see our platform probably moving into 95, 97 kind of capacity utilization as we move through the rest of the year and into 2027.

Speaker #4: And in evaluation of what happens more broadly in the European market if the market becomes more constructive.

Speaker #3: Thanks, Juan.

Speaker #2: Our go-to-market model, that we've instituted, is absolutely bearing results for us. We continually month on month see new business wins at margins that are attractive for us.

Speaker #5: Your next question comes from George Stafos with Bank of America. Please go ahead. Your line is open.

Speaker #6: Hi everyone. Good morning. Thanks for the details. So I wanted to dig into the operations a bit with fit-to-win and in particular Europe. So with fit-to-win, Gordon, you obviously made a lot of progress last year and the first portion of this year.

Speaker #2: So you put all that together, we have a lot of confidence in the medium-long term market opportunities in Europe. We see our margins improving.

Speaker #2: We know how to do that. We've demonstrated that in the Americas. We actually have pockets of Europe where we're executing very well, and we see the margins coming through, particularly in Southern Europe.

Speaker #6: Frankly, you've made a lot of progress this year. But we've seen a bit more you've acknowledged it, challenges in delivering as we've gotten into phase B.

Speaker #2: So you put all that together, we're bullish on Europe over the medium-longer term. There's we've got to execute more effectively on some of the basics around logistics and planning and get through this restructure.

Speaker #6: Does that have in any way, from your vantage point, reflect that it gets tougher and tougher to do the operational within fit-to-win, especially given the nature of making glass, given how fixed cost leveraged it is, in some ways how abusive the process of making glass is in the first place?

Speaker #2: And then continue to execute our fit-to-win and our go-to-market. So that's really how we're thinking about Europe. Still a very important market, very attractive market, and a market we can do very well in the quarters ahead.

Speaker #6: You're pulling tons through a furnace. Is there anything in fit-to-win that you're finding it's maybe a little bit tougher given your past experiences to execute in making glass just given how challenging manufacturing glass is in the first place?

Speaker #1: Okay. Thanks for that. And then just as a quick follow-up, or not so quick, but I did want to ask about some broad strokes for '27.

Speaker #1: I think you mentioned that not calling for a big recovery, but how should we think about net price? And then obviously the incremental fit-to-win benefits as well.

Speaker #6: And then I had a quick follow-on to that.

Speaker #1: Sure. Yeah. Let me address that in two ways. So if I look at the Americas, I think it's you can see the results coming through.

Speaker #1: And would there be any other large bucket items you can kind of help us with to frame where you can see '27 EBITDA land versus the original 1.45 billion guidance that you provided previously?

Speaker #1: And I think we were about ahead. We kind of started the phase B in the Americas. And fundamentally, you're changing culture, you're changing culture and plants, and you're changing some processes.

Speaker #3: Yeah, Aaron. This is John. I can give you a little bit more color in that regard. As we look to 2027 and the levers there, from a net price standpoint, at this point in time, we're thinking kind of neutral-ish.

Speaker #1: And with that, comes some challenges. But the process we have is it's pretty simple in many ways, but it requires a lot of discipline, and it requires some change management.

Speaker #3: So keep in mind we've had a very large amount of inflation this year and 55% of our business overall is covered under long-term agreements.

Speaker #1: And I think we've executed that well in the Americas. You are right, George. I mean, glass making is pretty unforgiving. And the parameters need to be tightly controlled.

Speaker #3: So there'll be a PAF recovery. It's typical in our business. There's a lag effect associated with that. So that will come through. Even in a world where we just assumed current elevated energy prices, the TTF at 55 to 60, we believe that we would have a neutral to even maybe modestly positive net price as we look forward.

Speaker #1: And a miss on some of those parameters sometimes can throw you out for a week or two weeks. And then if you have a furnace event, it tends to unsettle the whole network because you've then got to produce in maybe plants that wouldn't normally produce a particular product.

Speaker #3: That is that does not include any other actions that might occur. It doesn't include the potential of a resolution of the war, in which case then energy prices could go down and that could be a bigger tailwind.

Speaker #1: And that causes some disruption, right? So that has unsettled us a bit this year and particularly in Europe. Europe was really the last to go on the TOE disciplines.

Speaker #3: Okay? On a sales volume standpoint, we're penciling in kind of a continued mutus environment, but maybe flat to up 1% given that we do have 2% volume growth coming through.

Speaker #1: We're still betting them in. And the disruptions did have an impact on well, the disruptions were probably in two plants. It probably impacted six.

Speaker #3: And we will see that continues to build. And we will see what the net effect of that is overall. And then you have your 150 million dollars worth of plus of fit-to-win benefits, which are going to be substantially over they'll be skewed over to Europe as we work through the disruption this year.

Speaker #1: You're also kind of redirecting expert resources to away from maybe their job and there's some firefighting going on. So truth be told, that was part of the story of the first half.

Speaker #1: That notwithstanding, I would say in the vast majority of the plants, so we have what, 60 facilities? I would say in 50, 50, 52 of them, we see consistent improvement around TOE.

Speaker #3: And we complete the program, which is like we said, it's a little bit further along to go over Europe. Those are the big pieces.

Speaker #3: That kind of gets you to from your midpoint of the current year to the entry point of our guidance range of the 1.2 next year, with the upside being potential resolution of war and the tailwind there.

Speaker #1: Availability increasing, quality improving. Speed of lines improving. So we are making improvements. And remember, some of our plants were already very high performing. So in the high performing plants, there's probably a chunk less to improve that notwithstanding.

Speaker #3: And in evaluation of what happens more broadly in the European market if the market becomes more constructive.

Speaker #1: Thanks, Juan.

Speaker #4: Your next question comes from George Stafos with Bank of America. Please go ahead. Your line is open.

Speaker #1: I think weighted average, we are seeing significant improvements across the fleet. And what happens is, and I think I lay this out at idea, these kind of transformations are not linear.

Speaker #5: Hi, everyone. Good morning. Thanks for the details. So I wanted to dig into the operations a bit with fit-to-win and in particular Europe. So with fit-to-win, Gordon, you obviously made a lot of progress last year and the first portion of this year.

Speaker #1: And you'll always get some sort of bump along the way. But what I found in my experience is once you get through that, the kind of the system kind of re-energize itself and you start to hit those higher levels of performance.

Speaker #5: Frankly, you've made a lot of progress this year. But we've seen a bit more you've acknowledged it, challenges in delivering as we've gotten into phase B.

Speaker #1: And we certainly have enough data points around those three elements availability, quality, speed. And energy reduction to feel very confident that we are going to.

Speaker #5: Does that have in any way, from point, reflect that it gets tougher and tougher to do the operational within fit-to-win? Especially given the nature of making glass, given how fixed cost leveraged it is, in some ways how abusive the process of making glass is in the first place.

Speaker #1: At least 650 million. And we'll hit higher, maybe over a bit longer timeframe. So I'm not worried about that. If I could put it that way.

Speaker #1: I'm frustrated that we've had these stumbles particularly in Europe right in the middle of when we were reconfiguring the network to have two plants go down for a period.

Speaker #5: You're pulling tons through a furnace. Is there anything in fit-to-win that you're finding it's maybe a little bit tougher given your past experiences to execute in making glass just given how challenging manufacturing glass is in the first place?

Speaker #1: That's frustrating. That's held us back. But we own it. We know what went wrong. We know what to fix it. We have the right resources on it.

Speaker #5: And then I had a quick follow-on to that.

Speaker #2: Sure. Yeah. Let me address that in two ways. So if I look at the Americas, I think it's you can see the results coming through.

Speaker #1: And let me tell you, we'll be quite maniacal about getting the performance back to where it needs to be.

Speaker #2: But they appreciate the thoughts on there, Gordon.

Speaker #1: They're well taken.

Speaker #6: I think I know.

Speaker #2: And I think we were about ahead. We kind of started the phase B in the Americas. And fundamentally, you're changing culture, you're changing culture and plants, and you're changing some processes.

Speaker #2: What's that?

Speaker #1: They're well taken point. There's a well taken question.

Speaker #6: No, we appreciate it. I had a follow-on related. I think I know where you'll go with this, but nonetheless, I do want to ask the question.

Speaker #2: And with that, comes some challenges. But the process we have is it's pretty simple in many ways, but it requires a lot of discipline, and it requires some change management.

Speaker #6: So traditionally, glass making if you ran 92, 93 percent utilization rates, those were very, very good. When you ran over 95 percent, the view was that you would stress the furnaces.

Speaker #2: And I think we've executed that well in the Americas. You are right, George. I mean, glassmaking is pretty unforgiving. And the parameters need to be tightly controlled.

Speaker #6: You would pull too quickly. Is any of that filtering into what we've seen or not? I know you're trying to change the paradigm in glass.

Speaker #2: And a miss on some of those parameters sometimes can throw you out for a week or two weeks. And then if you have a furnace event, it tends to unsettle the whole network because you've then got to produce in maybe plants that wouldn't normally produce a particular product.

Speaker #6: And so maybe not. And as we think about Europe and some of the changes in the organization that we've seen over there, has that been because of alignment on the direction and the strategy?

Speaker #6: Or just execution and going out of parameters in terms of the execution? Thanks. And good luck in the quarter.

Speaker #2: And that causes some disruption, right? So that has unsettled us a bit this year and particularly in Europe. Europe was really the last to go on the TOE disciplines.

Speaker #1: Right. So two things. I'll take the second piece first if you don't mind. I think one of the things that became apparent as we moved through the second quarter is the extent to which we needed to work cross-functionally.

Speaker #2: We're still betting them in. And the disruptions did have an impact on well, the disruptions were probably in two plants. It probably impacted six.

Speaker #1: And I did flag up on idea that a goal was to get this business out of silos and working much more cross-functionally. And we've made huge progress on that.

Speaker #2: You're also kind of redirecting expert resources to away from maybe their job and there's some firefighting going on. So truth be told, that was part of the story of the first half.

Speaker #1: But I don't think we made enough progress on that in Europe, right? And we've now made changes in leadership in terms of driving a much more integrated cross-functional within the region, but also within the expert resources available at the global level to get them in as part of the team in a much more integrated way.

Speaker #2: That notwithstanding, I would say in the vast majority of the plants, so we have what, 60 facilities? I would say in 50, 50, 52 of them, we see consistent improvement around TOE.

Speaker #1: And already in the last kind of six weeks, we see that working much more effectively. The incidence we had that I called out both in France, the UK, and indeed the US is probably a result of what we were in the industry call over pulling on the furnace over years.

Speaker #2: Availability increasing, quality improving. Speed of lines improving. So we are making improvements. And remember, some of our plants were already very high performing. So in the high-performing plants, there's probably a chunk less to improve that notwithstanding.

Speaker #2: I think weighted average, we are seeing significant improvements across the fleet. And what happens is and I think I lay this out at IDA.

Speaker #1: And what we've done in our new system of TOE is we have strict pull rates depending on the kind of furnace. And part of TOE is to make sure that we do not overpull and therefore damage or burn down these furnaces more quickly than they should be.

Speaker #2: These kind of transformations are not linear. And you'll always get some sort of bump along the way. But what I found in my experience is once you get through that, the kind of the system kind of re-energizes itself and you start to hit those higher levels of performance.

Speaker #1: And that's a very rigorous discipline and that's looked at every day now. Whereas in the past, I think that was uncontrolled and you had plants over pulling.

Speaker #2: And we certainly have enough data points around those three elements, availability, quality, speed. And energy reduction to feel very confident that we are going to hit at least 650 million and we'll hit higher, maybe over a bit longer timeframe.

Speaker #1: And therefore burning down the furnaces more quickly. Or indeed under pulling and using way too much energy. And we have tremendous visibility on that on a daily basis.

Speaker #1: That's looked at on shift by the day at the plant manager level. And then that rolls up through the organization into the value office to make sure that we're within the parameters that these facilities should be run at.

Speaker #2: So I'm not worried about that. If I could put it that way. I'm frustrated that we've had these stumbles particularly in Europe right in the middle of when we were reconfiguring the network to have two plants go down for a period.

Speaker #1: So as we look forward, then you would expect over time to have far fewer of these events. The other thing I would say is as we one question you ask is, is fit to win the cause of some of these breakdowns?

Speaker #2: That's frustrating. That's held us back. But we own it. We know what went wrong. We know what to fix it. We have the right resources on it.

Speaker #1: And again, the answer is absolutely no. Because what we've done and fit to win is strip out cost and waste. And we've actually upped.

Speaker #2: And let me tell you, we'll be quite maniacal about getting the performance back to where it needs to be.

Speaker #1: Reinvestment in. Maintenance and engineering across the fleet over the last two years. And our engineering and maintenance has actually increased. Likely on a per ton basis.

Speaker #3: But there was.

Speaker #5: I appreciate the thoughts on that, Gordon. I think I know. Was that?

Speaker #2: There was taken point. There's a well-taken question.

Speaker #5: No, we appreciate it. I had a follow-on related. I think I know where you'll go with this, but nonetheless, I do want to ask the question.

Speaker #1: So this is really cultural change, process change that we're betting in. We have huge support from the plants on TOE. And huge support from people on the line that's either lives getting easier and managing these plants.

Speaker #5: So traditionally, glassmaking if you ran 92, 93 percent utilization rates, those were very, very good. When you ran over 95 percent, the view was that you would stress the furnaces.

Speaker #1: So I think we're in a good place. We stumbled in Europe no question about that. We own that. We know what went wrong. We know what the root causes are.

Speaker #5: You would pull too quickly. Is any of that filtering into what we've seen or not? I know you're trying to change the paradigm in glass.

Speaker #1: We're all over the root causes and we're fixing it. So I expect that performance and the operational performance to continue to improve in the Americas.

Speaker #5: And so maybe not. And as we think about Europe and some of the changes in the organization that we've seen over there, has that been because of alignment on the direction and the strategy or just execution and going out of parameters in terms of the execution?

Speaker #1: And I expect it to pick up a much faster pace in the next two to four quarters in Europe.

Speaker #2: Thank you very much, Gordon.

Speaker #1: Thanks, George.

Speaker #3: Your next question is from Anthony Pentenaire with City.

Speaker #5: Thanks. And good luck in quarter.

Speaker #2: Right. So two things. I'll take the second piece first if you don't mind. I think one of the things that became apparent as we moved through the second quarter is the extent to which we needed to work cross-functionally.

Speaker #1: Hey, Anthony.

Speaker #3: Please go ahead. Your line is open.

Speaker #7: Hey, good morning. This is actually Brian Bergmeier on for Anthony. Thanks for taking the question. Just on the fit to win savings. I know you're looking for another 120 million in the back half.

Speaker #7: I was just curious. Maybe how much of that is sort of already locked in based on actions you've already taken in the first half?

Speaker #2: And I did flag up on IDA that a goal was to get this business out of silos and working much more cross-functionally. And we've made huge progress on that.

Speaker #7: And then as we start to think about 2027, you're looking for another 150 million just sort of the same question. Is it possible to say how much could be sort of locked down by the end of the year and would just be maybe like a rollover benefit?

Speaker #2: But I don't think we made enough progress on that in Europe, right? And we've now made changes in leadership in terms of driving a much more integrated cross-functional within the region, but also within the expert resources available at the global level to get them in as part of the team in a much more integrated way.

Speaker #1: Yes. So anything we publish and hear and anything that's part of our value office program here is we have not only a clear target, but we have clear activities around timing, proper project management and resources around that.

Speaker #2: And already in the last kind of six weeks, we see that working much more effectively. The incidents we had that I called out both in France, the UK, and indeed the US is probably a result of what we were in the industry call over-pulling on the furnace over years.

Speaker #1: So I would say that as a governance piece. So none of this is kind of aspirational and none of it is we have a number, but we don't know how to get there.

Speaker #1: Okay? We do have further ideas on how to add more value. We just haven't figured out the path on some of those above the 150 for next year.

Speaker #2: And what we've done in our new system of TOE is we have strict pull rates depending on the kind of furnace. And part of TOE is to make sure that we do not over-pull and therefore damage or burn down these furnaces more quickly than they should be.

Speaker #1: But everything you're seeing and everything we're published there, they're deliberate programs and actions taking place day in, day out to deliver on that. So that's by way of kind of process.

Speaker #1: John?

Speaker #2: Yeah, yeah. I would add on there just looking at specifically at the numbers here. You're right. We have about 115, 120 million dollars in the back half.

Speaker #2: And that's a very rigorous discipline and that's looked at every day now. Whereas in the past, I think that was uncontrolled and you had plants over-pulling.

Speaker #2: Just under half of that is pretty much already locked and loaded because we've done the restructuring, we've done the SG&A actions by and large, things like that.

Speaker #2: And therefore burning down the furnaces more quickly. Or indeed under-pulling and using way too much energy. And we have tremendous visibility on that on a daily basis.

Speaker #2: The remaining component has to do with what we call more on that phase B activity, more this improving the operations, addressing the things that we're talking about in Europe, as well as moving forward some of those programs around energy usage that Gordon was talking about and other factors.

Speaker #2: That's looked at on shift by the day at the plant manager level. And then that rolls up through the organization into the value office to make sure that we're within the parameters that these facilities should be run at.

Speaker #2: So going into next year in the 150, there's a decent number. I don't have a specific number. I would say probably a third of it off the top of my head is probably locked and loaded because it's just a carry-on effect of annualization effect of things that are already done.

Speaker #2: So as we look forward, then you would expect over time to have far fewer of these events. The other thing I would say is as we one question you ask is fit to win the cause of some of these breakdowns.

Speaker #2: And the remaining component has to do with more operational improvement. Again, focus more on Europe.

Speaker #1: Yeah. With the programs are safe, they're set by plan by supply chain. So it's a function of executing the month by month. Yeah.

Speaker #2: And again, the answer is absolutely no, because what we've done and fit to win is strip out cost and waste. And we've actually upped or reinvestment in maintenance and engineering across the fleet over the last two years.

Speaker #7: Got it. Got it. Thanks for that. And then just one follow-up. It seems like South America and Brazil did pretty well in the quarter.

Speaker #7: Just kind of curious your assumptions there for the second half. I guess some other beverage packagers maybe sound a little conservative in the second half.

Speaker #2: And our engineering and maintenance has actually increased slightly on a per-ton basis. So this is really cultural change, process change that we're betting in.

Speaker #7: So maybe just curious how much of that kind of volume momentum could carry through. Thanks. I'll turn it over.

Speaker #1: Yeah. Brian, is that in reference to Latin America or overall?

Speaker #7: Yeah. South America. And Brazil specifically. Thanks.

Speaker #2: We have huge support from the plants on TOE. And huge support from people on the line that's either lives getting easier and managing these plants.

Speaker #1: Yeah. Our business has performing exceptionally well in Brazil and in the Andean region and indeed Mexico, albeit off lower volumes. So the teams there executing or fit to win extremely well.

Speaker #2: So I think we're in a good place. We stumbled in Europe, no question about that. We own that. We know what went wrong. We know what the root causes are.

Speaker #1: Executing or go-to-market extremely well. And we're picking up new business. And executing the strategy as it should be. So we expect that performance to continue to the end of the year and well into next year.

Speaker #2: We're all over the root causes and we're fixing it. So I expect that performance and the operational performance to continue to improve in the Americas.

Speaker #2: And I expect it to pick up a much faster pace in the next two to four quarters in Europe.

Speaker #5: Thank you very much, Gordon.

Speaker #1: So yeah. Demand is good for us. If I give you a view, we're up in spirits in Brazil. We're up in food. We're up in RTDs.

Speaker #2: Thanks, George.

Speaker #1: Your next question is from Anthony Pentenaire with City.

Speaker #2: Hey, Anthony.

Speaker #1: Please go ahead. Your line is open.

Speaker #1: We're. And when I say we're up, we're growing ahead of the market. And then we're growing at market in beer. In Brazil. So I see that market continuing to perform strongly.

Speaker #5: Hey, good morning. This is actually Brian Bergmeier on for Anthony. Thanks for taking the question. Just on the fit-to-win savings. I know you're looking for another 120 million in the back half.

Speaker #5: I was just curious maybe how much of that is sort of already locked in based on actions you've already taken in the first half?

Speaker #1: And then in our Andean business, we're growing ahead of the market in beer, ahead of the market in spirits, ahead of the market in wine, ahead of the market in food.

Speaker #5: And then as we start to think about 2027, you're looking for another 150 million just sort of the same question. Is it possible to say how much could be sort of locked down by the end of the year and would just be maybe like a rollover benefit?

Speaker #1: Ahead of the market in RTDs. And growing at market in food. So very strong performance there. In Mexico, volumes are a bit off due to tequila exports being down.

Speaker #2: Yes. So anything we publish in here and anything that's part of our value office program here is we have not only a clear target, but we have clear activities around timing, proper project management and resources around that.

Speaker #1: And Mexican beer imports into the US. But our team there executing fit to win exceptionally well and delivering very strong financial performance. So overall, we're very happy with how our Latin American business is performing.

Speaker #1: And we expect that performance to continue.

Speaker #2: So I would say that as a governance piece. So none of this is kind of aspirational and none of it is we have a number, but we don't know how to get there.

Speaker #3: There are no further questions at this time. I will now turn the call back to Chris Manuel for the closing remarks.

Speaker #4: Thank you. That concludes our earnings call. Please note our third quarter call is scheduled for Wednesday, October 28th, 2026. And remember, make it a memorable moment by choosing safe, sustainable glass.

Speaker #2: Okay? We do have further ideas on how to add more value. We just haven't figured out the path on some of those above the 150 for next year.

Speaker #4: Thank you.

Speaker #2: But everything you're seeing and everything we're published there, they're deliberate programs and actions taking place day in, day out to deliver on that. So that's by way of kind of process.

Speaker #2: John?

Speaker #5: Yeah, yeah. I would add on there, just looking at specifically at the numbers here, you're right. We have about 115, 120 million dollars in the back half.

Speaker #5: Just under half of that is pretty much already locked and loaded because we've done the restructuring, we've done the SG&A actions by and large, things like that.

Speaker #5: The remaining component has to do with what we call more on that phase B activity, more this improving the operations, addressing the things that we're talking about in Europe, as well as moving forward some of those programs around energy usage that Gordon was talking about and other factors.

Speaker #5: So yeah, so going in the next year too, in the 150, there's a decent number. I don't have a specific number. I would say probably a third of it off the top of my head is probably locked and loaded because it's just a carry-on effect of annualization effect of things that are already done.

Speaker #5: And the remaining component has to do with more operational improvement. Again, focus more on Europe.

Speaker #2: Yeah. With the programs are safe, they're set by plan by supply chain. So it's a function of executing the month by month. Yeah.

Speaker #5: Got it. Got it. Thanks for that. And then just one follow-up. It seems like South America, Brazil did pretty well in the quarter. Just kind of curious your assumptions there for the second half.

Speaker #5: I guess some other beverage packagers maybe sound a little conservative in the second half. So maybe just curious how much of that kind of volume momentum could carry through.

Speaker #5: Thanks. I'll turn it over.

Speaker #2: Yeah. And Brian, is that in reference to Latin America or overall?

Speaker #5: South America. And Brazil specifically. Thanks.

Speaker #2: Yeah. Our business's performing exceptionally well in Brazil and in the Andean region and indeed Mexico, albeit off lower volumes. So the teams there executing or fit to win extremely well.

Speaker #2: Executing or go-to-market extremely well. And we're picking up new business. And executing the strategy as it should be. So we expect that performance to continue to the end of the year and well into next year.

Speaker #2: So yeah, demand is good for us. If I give you a view, we're up in spirits in Brazil. We're up in food. We're up in RTDs.

Speaker #2: We're and when I say we're up, we're growing ahead of the market. And then we're growing at market in beer in Brazil. So I see that market continuing to perform strongly.

Speaker #2: And then in our Andean business, we're ahead of the market in spirits, ahead of the market in wine, ahead of the market in food.

Speaker #2: Ahead of the market in RTDs and growing at market in food. So very strong performance there. And Mexico, volumes are a bit off due to tequila exports being down and Mexican beer imports into the US.

Speaker #2: But our team there executing fit-to-win exceptionally well and delivering very strong financial performance. So overall, we're very happy with how our Latin American business is performing.

Speaker #2: And we expect that performance to continue.

Speaker #1: There are no further questions at this time. I will now turn the call back to Chris Manuel for the closing remarks.

Speaker #3: Thank you. That concludes our earnings call. Please note our third quarter call is scheduled for Wednesday, October 28th, 2026. And remember, make it a memorable moment by choosing safe, sustainable glass.

Speaker #3: Thank you.

Q2 2026 O-I Glass Inc Earnings Call

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