O-I Glass (OI) 2 Aug 232023 Q2 Earnings call transcript

Good morning, and welcome to the O-I Glass Second Quarter 2023 Earnings Conference Call. My name is Carla, and I'll be the operator for today’s call. [Operator Instructions]

I'll now hand the call over to your host, Chris Manuel, Vice President of Investor Relations to begin. Please go ahead when you’re ready.

welcome, conference the call. and quarter Glass Carla earnings XXXX you, everyone, O-I to second Thank

Our Andres and CFO. Lopez, today our discussion will CEO; John be Haudrich, led by our

financial business and key discuss will we review Today, our results. developments

Following prepared Q&A materials the company's this financial for use Safe the included host Harbor are those on disclosure Please measures session. of of available our Presentation call website. we remarks, will a review materials. comments in and non-GAAP

who the turn on call to will like Andres, start X. to I'd Now Slide over

Good and thanks O-I. morning, for everyone your in interest

prior results performance We more I from benefited announce are and initiatives. $X.XX our XX% operating pleased a price year to net earnings favorable expansion from and adjusted macro strong per well our night results. second Last Adjusted range as quarter which margin solid exceeded a guidance despite earnings conditions. share, ongoing as of challenging represented reported increase

primarily, inventory increase consumer was as slower due planned as volume a sales well costs additional asset supply some Likewise, expected, stocking. to with for temporary demand activity. down As balance to downtime customer we project and consumption did

In strategy, macros. the challenging despite advance addition to our more strong results, we to continue

initiatives between our will technology of are full earnings guidance on efforts X.XX margin we provided reflecting performance, all have adjusted deleveraging Our expansion and and expect range including our very year improvement plan efforts, per and track, plans, other and development well now breakthrough ahead remain $X.XX of share. good year-to-date

quarter John expand performance a represents $X.XX $X.XX third bit also financial per provided of year. and share, have which will third solid from later. quarter a to our outlook adjusted guidance earnings on increase We last

structural as with lower on benefit and primarily from of selling increases to year adjustment strengths, more formulas up of which sales year heading well left. consistent segment the and prices higher prior sales the was prior from Slide like was O-I as year, move recent discuss benefit contract with increased quarter. price into X% last actions. annualized Price sales volume, than renegotiations, Let's the reflecting offset chart the pricing XX% our expectations the annual the X, starting as

inflation current are this Additionally, incurring incremental year. cost increases market are offsetting we the year open

hand, year volume which internal this lower of is for the the was down of We the half to end customer X% about and On balance the most our consumption, from high of sales recent consumer accounted stocking inventory the other period, while prior on our attribute decline constraints guidance. shift.

and our both reflects most were was was our Southern the Shipments concentrated decline across wine the but in record and Europe levels. our in pronounced Europe, Americas was certain XX% about the of which down and category, inventory same decline categories geographies. in low primarily Around

notably consumption one-fourth for those are Europe, local in softer well most volume a demand reflecting exported accounted as little world. drop as the our Beer many lower of brands around global of over Northern as

Additionally, led inventory solid barrels Latin to despite lower consumption trends. across of beer shipments America stocking

activity a decline represented has Mexican a moderated drop in as also the Finally, consumption one-fourth spirits tequila our strong with about recently. of noticeable

As Nielsen consumer indicates on illustrated trends. mixed the data consumption right,

data only this has Importantly, believe on-premise and been robust. demand, consumption reflects retail we

in the retail basis, wine the in European declined consumer modestly. On Mexico down most while beer, a was domain year-to-date and US US beer purchases and

beer of well number the US. as other in grow, as Colombia in Brazil continue a spirits markets both hand, the On to and both including in

signs As and July. show noted, initial in consumer in some consumption improvement categories certain did June of

consumer down single-digits better saw down, a but third was customers with high mid volume quarter. shipments a in quarter the while quarter. parts. Our and phase for as anticipate we the and fourth bit further Overall, July volume our than evolving in we point, this stocking will second exit to choppy be the At trends sales expect we we will improvement to remain mixed calibrate

long-term glass trends X. caused is slide on growth Thus

have of wellness past decades, and we seen sustainability. the some glass benefit and several the including strongest glass, years, fundamentals that health For in premiumization, megatrends reflecting

at home COVID of picked up and during pre-pandemic dining remains Additionally, levels.

shipments, under were volumes pressure O-I's XXXX in the the favorable during on a While past, year X.X% increased XXXX JVs, including our to reflecting these period, average about trends.

As there and significant this market been many illustrated right, during on the uppers given ongoing have downs volatility. period,

the subsided current Shipments demand. we with customers were short-term some has rebounded as disrupted Yet supply. and of by the and security Certainly, will economic COVID disrupted contend pandemic prioritize downturn challenges. again,

are by However, our expansion we supported up contracts. by expect shipments will in XXXX, long-term projects, aided be which

if depend we will market that and time, the expect or it between grow XXXX. be year the unclear is X% we across will since will markets robust on is shape projections timing of and recovery. have Over and demand trend which improvement the seen third-party Currently, broader X% we which more a consistent with moderate, serve, the long-term

megatrends, by a expansion plans continued their and federal encouraged and interest growing our customers summary, around in in strong premium glass business remain future In containers. our building we sustainable

on our XXXX Let's key strategic of are progressing status discuss the slide Overall, X. initiatives objectives our well.

margin operating Second pace our from exceed XXXX approximated strong initiatives XX.X%, margins was which the a prior goal. than are is our year. on target and price improvement annual profit quarter double expansion more to our The segment

plans which year, growth on next profitable for year current target. commissioned first projects our be includes should mid-XXXX. expansion including new by set MAGMA Our plans and remain This for greenfield,

testing initial which well, is we successfully lightweighting development Importantly, to completed of barrels, ULTRA first broader opens MAGMA of new and progressing our deployment this market qualification and technology.

leverage below and times. efforts will comfortably confident highly we these efforts advocacy year O-I. I'm ESG three as advance are our strategy continue to should transform our nicely, Finally, and debt progressing net the end glass

John to review to X. over starting matters it turn I'll Page Now on financial

$X.XX guidance. O-I and Andres, exceeded and per reported quarter Thanks, of prior share, second good which results adjusted both morning, earnings year everyone.

we financial As noted improvement left, key posted have on the all year-over-year across measures.

from Americas million, as segment global last profit in Segment stable year. $XXX totaled the improvement operating was a in up about XX% Europe profit operating and representing

up approximated noted, from points XX.X%, prior margins XXX basis year. the Andres As

good you we can performance sales with operating due profit costs see operating and the benefited expansion segment, demand. inventory our These some curtail as volume lower higher As margin to asset price planned more project activity. well and revaluation to operating offset Likewise, in supply structural benefits unfavorable very improvements, from than right did lower and initiatives. as balance production

The Americas curtailment temporary commercial and sales as performance, in costs was reported was $XXX Andres operating segment unfavorable operating million, good volume benefited solid from inventory revaluation. Higher prior which year. execution while down, production project with profit Earnings and of activity, noted. the contract planned reflected line

impact up year. than prior margin net volume. favorable In price, earnings operating some production Higher substantially Europe, and offset the performance segment more significantly operating which profit was reflected initiatives curtailment. lower temporary million, sales offset from solid of the expansion $XXX Furthermore,

improvement chart strong on the The margin earnings again, details and volatile Yet company which a additional macro items, were non-operating pretty provides expense. environment. delivered interest highly except stable, higher despite for

Page move Let's X to and discuss outlook. business our

full at and reflecting have per significant year now the substantially guidance We which be we initial range, We performance. provided year the good a increase results expect represents from $X.XX adjusted approximate up share, will year. XXXX year-to-date tightened prior $X.XX this sales very earnings of and to the our start outlook will year

sales from does account the is variability million, approximate of volume will this guidance. flow some $XXX over increase cash XXXX. free for second potential capital expect an also and in outlook trends which initial our Keep We working half mind, in

balance year Looking earnings adjusted third year, at results. from we a which $X.XX of to the $X.XX the share, will expect prior represents quarter per increase approximate solid

primarily to macro outlook given we uncertainty. at $X.XX guidance We tax $X.XX initial $X.XX to to due down $X.XX compared which Likewise, conservative our per headwind. prior fourth could year-over-year are year, elevated quarter the estimate setting higher which is be rate, remains an a share, in

through The provides just guidance, elevated past continues seen full quarterly to years, company on have manage additional details chart volatility. three we the as over and the year well

intend to XXXX under to While volume remain control believe on deliver will remain and performance our XXXX. we the and performance optimistic outlook. strong expect uncertain, trends in improve our leverage business and Overall, continue manage in we

progress earnings improvement, which a of X, several the reflects comprehensive cash builds certainly, on enable performance to consistent key and trend Moving is performance across This very a our number to approach last levers. year-to-date operating sustainable strong, flow over page years.

is line profits operating margins and strong. Segment are top up. The

in our And We balance portfolio. improved in our business place best over is the sheet have decade. a

expectations As met Street or a for quarters. result, consecutive exceeded XX have we either

Importantly, XXXX in confident earnings, enable our sustained and into will improvement we are cash efforts margins flow future. the and

capital Let capital by wrap-up structure remains on XX. priorities. our priority. our Improving top our I'm me page allocation covering

As noted, year. expect sometime we to three end balance leverage our X.X the the times below of next levered, year times attain and target sheet should

Returning program. our second $XXX our is shareholders is fund growth, expansion priority final Our including our priority. current to value to profitable million

real consider may we program, year. leverage closer repurchases additional target repurchase share anti-dilutive a ongoing our our we to as and/or addition get In dividend to stating next share

Anders, Now back for XX. to on concluding remarks page

are our more macro with we second despite conclusion, which adjusted and In environment. pleased a John. quarter last up from guidance were XX% challenging exceeded year Thanks, earnings,

We are agility, and execution. delivering commitments, our demonstrate on strong improved resilience which

very initiatives strong the to to continue key many strategy performance, good plan. to first addition half we our In a advance with are of favorably tracking

a and Likewise, will earnings be expect to year XX% full adjusted tightened robust we our year. up this guidance have XX%

best are on past our we way XX the fact, well in years. our In delivering to performance

past foundation established future the will years. anticipate earnings strong to as continue we improve, Importantly, we the leverage over several

financial our enable investment successfully further like represents an profile, and and to program, O-I transformation and ULTRA profitable leverage believe, our economy. green further new MAGMA strengthen execute advanced we in sustainability position long-term win opportunity I the Finally, growth our breakthrough innovations attractive as leverage

and value allocation. We for create all this support will capital stakeholders are confident future strategy shareholder-friendly

Thank your to you. address And we're questions. ready

Baird. [Operator Ghansham Thank comes from from question Instructions] Our you. first Panjabi

go Your line now open. is ahead. Please

Yes. Hi from… everybody. Apart morning, good

morning. Good

major destocking, is are a you customers categories? Diageo side the perspective along the XXXX? categories, big in of at calling supply you … a as XXXX which if a of Clearly, Spirit reset adjust year in point-of-sale lot apart side. But on earlier a chain. point, volume volume from inventories volume variety this weakness And so, -- in this week your on including out improvement from anticipating inventory are for

details we about Ghansham, emphasize I the during of opening to but things. some couple demand, remarks would like a share Yes,

there across as first softer destocking. consumption well supply is one pattern is The chain a as markets. consumer general with

everywhere. applies that So

highlight like Now, to would markets. I two

inventories had in with is year, we Europe which but Southwest volume the don't. to O-I, year, last by year-on-year, and demand we this primarily low largest serve available is the incremental drop driven one in

some So favorable that comparison. creates year-on-year

there quite as market over very which a supply, is the constraints now is is of the healthy empty reusing the Andean a well that The amount challenge And this temporary which important imported large where as consumption and of demand over Brazil, why, is overall consumer segment is because there quite for good. the market and strong. However, supply is local market last glass, that glass a using the is chain customers years, two they're very situation. oil the

So, market is good. the

In of is ahead fact, is and just every X.X% substrate. glass growing as the in an example, of year-to-date one Brazil,

a market. So, going pretty through healthy just a temporary They're adjustment.

sales overall obviously to volume predict. the choppy. Now, It's is difficult

improvement we July. in However, saw some

Now, today, available improvement in if information we're XX% the second at markets the the we half best seeing of we look in serve.

Now, going will is improvement along into some some in the this will half, second start markets XXXX. improve to improving carry QX that

I temporary signs we're in through as recovery into later adjustment and some So, we're some think starting up going XXXX. of a the we year and go seeing move but

do that, on expansion substantially building And is next programs year. our coming we online have Ghansham,

on in first full next two coming be have projects Canada in We and one year, that that in are swing our one Colombia year. and this will

we in Peru Kentucky MAGMA underway and have Brazil, first Scotland, additional in mid-XXXX. facility well as expansion our as then And with

about type if look X% take through So, -- a a embedded volumes coming all on plus of minus year-on-year of you probably that, basis at or additional those of them. growth that's just

basis, as And on brings million fully in, the $XXX for $XXX to many business. they're past, scope annualized million in in about times of said profit that once we've an the

in next be on So, good year. shot was the about of arm that Andres top will talking a the that recovery

guided gave missed also half I the the I'm curtailment be XQ? And you you back the what impact operating was the Terrific. of would for EPS if since in of a to based sense as mid-XXXXs? that out. you embedding what to lowest just And trying number are What to that year? I'm in sorry the then why profit, that get terms just on if on Okay.

Yes.

of withholding in a fourth thing so have on the is in Keep part just that Just fairly tax the mind, the probably one last mix. the quarter. elements we matter put -- taxes high earnings it various of quarter fourth in It's a comments the timing in on mid-XXs. and rate prepared I just in will regional

about fourth $X.XX So the an that's impact on quarter.

profit, sense that consistent give that regard. be normalize you last to a to you pretty just it's for year's with going If operating in

keep So, there's in of aberration bit little an a there. mind,

a cost, why take curtailment the of in operating you second of at plus and that's $XX there the quarter. But quarter. about higher the skewed if costs costs was curtailment It hit would Americas, second the we look we some see had to in million the

of and on cold a we correspond EBIT volume sensitivity depends taking furnaces and impact adjust sense you're really our basis, to or levels $X like million whether as sales production down every million that anywhere Just X% that. with it adjustments quarterly on curtailment, is from $X on a things to lines

similar the the in absorbed a first in started -- look But of a address our the some that the volume the back build $XX in in also back could we the of in sales outlook. the I'd half But -- half, anywhere get year that's of see third fourth to again, to the of absorbed, have we the that pressure call that from, in also swing of some absorbed and that we from rebalance a is the get as level understanding you you're back volume half as there outlook. up probably to that year, looking say, inventories will factors And it, in the to we at half sales our be take million better and year. quarter then and might quarter, be

absorbing despite pretty back well the of So, posting we're volume, as not the actually good half year. numbers curtailment as in obviously sales the cost, the

Ghansham. Thanks,

from George next question Our America. comes from Staphos Bank of

ahead. go Your line Please is open. now

America, of some you're the good Hi. -- excuse South to hope that having morning. about you details all -- curtailments slide is me, of you you Europe, in guess, a within talked Andres, go in constraints the mentioned also Thanks there wine the And some for X. if I way and had, important what total and a we had Ghansham's terms how of it overall, categories. reverses your some should your markets? next of said some down did that year? for the you break in of You that, to effect And of question, X% were that constraints more important most example, the we but expect in in again,

Yes.

well are both for as you what very demand. the Andean know we're that pretty And -- market, So the as a healthy in is important Brazil markets us. seeing

would you glass imports now empty substantial how years. imagine over tight So, was quite were the the last of of because the supply chain two

consume, and So been consumed we this that at data it's point.

months. again, some seeing coming supply the products we to to normalize the premium the for we're market two, segment, growing back in Now, are this that that key over example, in and next the expect recovery, three Andean countries

to seeing So, that we Southwest that we're market comps, well. drop more should Brazil get Europe point we contribute time. once in see at into this favorable this won't

part because been it's I doing into categories. And America flat. think even offsetting premise year, in lower in growth fully market higher we've the and And on-premise been away from fairly beer order. been mega each It's been North well. has off The diversifying

strength markets. So, the we a see in

in into I rebound And quarter think we XXXX. that markets into continue half, should and a transition start and we right seeing second as point are go the all to we these the starting important fourth then now.

build out that… And on the

capacity That's for what the for from and was number of end can there. negative X% give total, us bigger regions? you a the say would I getting I or of John, kind guess, I inventory at markets constraints some

Southern and wine Southeast low all almost was okay, a in our those where It specifically record markets. was had basically That's constraints. in Europe. It inventory we Europe, Southwest Yeah.

issues down quarter, Coast of we that. and West second US had the because go That into and like rest in over the translate back things civil you to the strikes of and and and first If not weather the on Peru quarter. did

So our specifically wine was constraint from a standpoint issue Europe. in in

Okay.

we year wine. we're result, And in be inventories. would softness position position. a question again, And seeing as into that half serve I the we're second right are in better I catch now, year, the to we, what of in your up much lower I in And should able on the better next that think to of think with of to the some being some a a say other much

George. Thanks,

ahead. Our next Citi. from go question from comes Please Anthony Pettinari

Good morning.

Good morning.

on up Hey, question, following just up – Just just on following Ghansham's a and George’s, little guess, bit. I

what free some just three On have guess earnings continued months if earnings cash sort in in about flow. and puts next can grow of the could growth 'XX you talk not to and in takes. previous get call, I'm maybe later, you and higher things XXXX maybe changed or level there's earnings wondering some I earnings earnings talked what end improvement about confidence cause and growth could year-over-year about a to of of year? you

Yes, Yes. Anthony. sure,

three one I of into I we which primary little think that macro. believe think are is confidence a control other the and next there's good have less around in look we levers more bit our or we more as year, two

The first feel X%. or plus growth our new to year, one volume which is confident we back about expectation the on say, next pretty of minus expansion sales let's capital, the

the be of or V-shape with next the by plus the overall have our expansion expansion recovery would in our which what mean, shape moderate control. customers is So recovery, recovery of whether of that. recovery. year a something right? of know as business the the whether volumes to we it business would said in mention because the driven comments, expansion slower the be, our and things in more time, -- contracted that's It's a recovery, the a robust will macro Not we in at it with like this in don't point I

between or whether of those. our good a on the area, a really a So little margin control think, performance initiatives. robust is benefit We've next a is next within I it moderate that's year. The swing to bit our again, factor, done expansion

in North year. know, America. past, this and the We're a we should on year you As focus lot that with million exceed about a were targeting $XXX $XX targeting million of

annualized that shot that a doing arm program we're year, gives I believe too. including think We a and next America progress has that's so which and good more that good the this us year legs in North that, in benefits,

time, At it when then of variable what neutral net the net And price. anticipating with in third price. comes kind are -- is point just this happens we

how of our business our with you If in next business in long-term formulas. inflation business, at under are that of year. which And book we is adjustment to works year, incurring XX% that substantially X% this agreements recovered will be price look X% still

that's open time, inflationary but year. we in net in would to which bit net what it's our macro being tell in early some just maybe at are later over be control, more declining the the that. So suggest substantial two comes one about look Again, other amount with volumes. softer pretty more we're able against the the price, those That together driven. deliver three because market let's too softness of it next confident business probably higher those pretty and to might in environment call variables and little But a the the price a a is ultimately there even year

may a or destocking, I'm Okay. to how from sort one much sense get two-quarter give be maybe Is is impact. to of this And of like trying X% possible a That's inventory customers do just customer follow-up. you levels. very sense helpful. impact think of customer just carrying? quick headwind inventories to The a one quarter a then it X%

all serve categories, which have is, what Anthony, of say inventory. I'd approaches we different different end-use that on many

of goods quickly. that few to beer go finished and there's chain, pretty a correct speaking, only in tends weeks, the to generally and You

a levels You're inventory. categories up ones ship talking and a may spirits of more bit chains different little into moderate longer end having value little longer, So food bit internationally be right? the and some of much other and that

But of believe fundamentally. a probably what data you I the phase we So and few to with consumption consumer we're a simple know time, at of is which in a kind translating shifting to see and more associated with don't out as this transition fundamental point if down that. we there's that destocking patterns, starting percent think, much Nielsen whatever the see into is answer

at in at looking the -- Andean that in Yes. positive third pretty impact consuming should we the much And quarter, that we have Brazil, quarter. seeing has been countries, inventory finalized when the a look consumed

Anthony. Thanks,

from Our next from question Mike Truist comes Roxland Securities.

ahead. go Your line is now open. Please

you. Andres, despite a on good backdrop the Thank Chris. Congrats quarter John,

Thanks, Mike

Mike Thanks,

Just want of through sequentially destocking. destocking get follow volumes like the in of some the cadence started on about about to you talk questions Can XQ? up January, it declined April. in Sounds the to

June. from some saw I I to think your and correctly improvement in if again recall then call May you started last soften in

terms talk happened about improved. during on has can -- is as mentioned quantify can improvement basis a you you destocking and well? How you what that QX much of So what July in itself sequential

month, in One say low And down that. May us month-to-month you of things saw kind back is our saw what and minus in digits. to that then June X%. single like We quantify bounce of digits that double I for high volumes, cadence down it's probably a to kind X%, minus thing saw per was we se I overall the a tough April would destocking mean difficult

and really But are tell to through little what, you difficult pretty bit been demand people destocking to to and everything. it's especially starting that's it at it's fundamental the So be choppy, a calibrate tail to destocking makes tends environment, over from end choppy what a when I'll read patterns.

of the sense gives the that phase. destocking we're of probably us some in stages kind later that So

this at we showing as before, form we of we're Yes. the seeing And XX% about serve, markets point. some of improvement mentioned

QX, them into for and sure in going of them started XXXX. of QX Some some in

outlook. plus on John, try control in you some terms if we tailwinds quantify, things there. your just in follow-up that. And it. cost I color possibly nature, I the maybe Thank Got you so the appreciate price to -- your for of quick assume and gave one control XXXX

growth in million MEI $XXX EBITDA to call a or the you $XXX get your million. improvement Is EBITDA way incremental on that about through million be thinking year-over-year then projects, and $XXX benefits to right basis? expansion quantitative the it get of sequential You

Yeah, I into want to specific get don't numbers.

We would million is it's a take I XXXX What a the guidance on if of say the total provided really per $XXX life over but you about projects, on haven't is, look se. expansion a basis. we'll rate year. follow all into next know, to don't next of run I have that because then year going had have this if a we're year we some and We'll get some XXXX.

I about think the expansion initiatives. you're margin right probably

I And price. said, think we're again, I in we're looking this early at little a the robust call neutral assuming like it's a then it's number there. to And time, just net at point

Mike. Thanks,

RBC Our from from Capital. next Viswanathan question comes Arun

now Your ahead. line is Please go open.

Great. environment. demand taking I the Thanks my wanted just for ask to question. about

you maybe did velocity some softening you're during and of just the sorry, what categories areas quarter, expect give across update, over I some experience Thanks. you an some where of year? certain seeing you velocity maybe markets, other strength -- Could the before. your guys the note think some higher you and in us what on keep markets the rest lower of major the

Yeah.

So in line. And closely we so at the far impact low it's largest categories, we've inventories. seen we when that the related -- mentioned is OI before, to as look

those is much temporary. the So inventories, very it makes itself it's which market as not

And consumption. tequila some not was seen in the in coming have from category growth in is slower beer a of before. a spirits, North Central lower in we've that's impact Europe fast by seen driven still growing Mexico as it as We been particularly but growing, decrease and primarily

Thanks, Arun.

from next Wells David Security. from Page Our comes question Fargo

Your line Please is now ahead. open. go

John, morning. little to open left door -- good a Chris, bit. wanted I John, the Andres, you

the ask I try So want to to question.

exposure open the you that supply-demand sort -- sort XX% some business of dynamics of we America. sort In in is then referenced, contract. the it by capacity the out that's just and North the here long-term obviously, you market about market of in geography, your what had terms of the there of sort of maybe break different outside come out more our of Can regions, thinking

relatively in So Brazil, different I comment market snug be feel that that, growing. should it's but similar

about, pretty of and is yourselves coming So back I some, where -- and going do you of said, like others production. people trying coming localized lot dynamics are sort the be But then should guess, into the area thinking how it just then one business? back I capacity have focused think this your XXXX. some I open there. Europe supply-demand exposure a that And of think lines you're tight online kind it market I are potential of like some more adding to sounds to

Yeah.

Okay.

cases. the February each our of market, XX% okay, year our in most just mix our price reset to adjustment is that and base, start is type one-year So be of formulas long-term with to agreements that again, -- of November contract have agreement of globally business under XX% tends and open get that between generally

if look open It's about XX% that XX% market. at Europe, open take one just thing. skewed fixed in we market the regionally, you a So have to

that I and customers smaller regard. think of a lot in right, wineries

agreements, probably more bit open in maybe XX% down towards you America, little or the that into Latin amount and North small business. in And get America area, XX-XX a it's with long-term Over multiyear under whatever very market. if is into contracted skewed contracts

just natural market history then the open And of I price that there's think through in given with of activities region. inflation a process working the

that of So category. that's the of mix kind

of - split look coming That's some is the all make the three markets. million over X in announced a we jump Americas, over understanding, side, capacity in But comments the which if and on on and system. years globally, demand about you Europe year. it's ton and I'll our if -- a XX next tons million take operate initial online, capacity the each wants Andres tons is glass XX on consumed to million about to On there's about new that, of too. see capacity different There

fundamental to coming of it line that's X% position growth period an X.X% straight kind time. X% across -- overall new just online with the annual line capacity at of calling you to in of that's if the X% marketplace. the of And But kind of on basis,

And of coming that. so capacity a new about is yes, third We're on. some

capacity. actually it some replacing And outmoded of is

So that incremental profile the marketing a multiple we we that at think But necessarily it's the it's look over growth if not of all expected very to years, longer expansion. arc of take the relative capacity level of a responsible

to perhaps half O-I, is the with the line second is and category new in in and to still Yes, that at coming with the in capacity capacity the strong for the of of consumer complement end Andean premium part XXXX well. countries demand growing regards really

investment over a there. So good that's pretty

that is up before here XX.X%. our glass glass beer, indexed which mentioned is I to up today Premium Brazil, is XX%.

market we'll coming and capacity in pretty up is this XXXX over there. have So some solid,

The to we the of well serve the market, good located that very capacity long-term region, scotch growth. at right factory center to for very prospects that with goes over the U.K. is a so have

contract there. Canada is already that is in investment The under volume localization for of a

serve So pretty growing risk. low one and the the it's And in U.S. a the to is Kentucky other business. spirits market in market local export

O-I. new coming up good are in for place a we a capacity So, from very

Thank you that. for

quarter. capital topic over. and opportunity like doing sort are some in an quickly qualified like -- maybe about deploy seems little across to The things you and maybe don't It you quarter. system? Colombia that something that opportunity to you second the that? about that less looks your that so factories Ultra, MAGMA, to than that's in here on I I guys across other bit But is this one of a there? it know Can glossed wanted to like it those second your I is the bottles of can of bit We how little And or had talk a in a done wanted maybe misunderstood dig some I second like just then during it's intensive like the leverage talk what you just feel

Yeah.

we've So we qualifying successful very in recently. it Colombia, where did been which ULTRA is

is case, planning strong interest are investments that. in a Europe, other We in where this in there

is that As intensity investment you mentioned, capital low. the of

very weight we we reduction, positive So planning that good, go horizons quite the that's have is is good. sustainability. will which as what on early that. of today, impact Remember quite a high as And are that to have XX%

going is will glass the ULTRA, further a point fairly future. the sustainability a help to we're to investments So stand in which container talking from be in position stronger soon lot about

your capital lower aspect And the scaled quicker Gabe, up point, good ULTRA is it to think of be I intensity. at can

able we work the to boost the ultimate road, address be we the think really for the the bringing going as we in give about in current The include broader down marketplace, which is MAGMA, forward. on to MAGNA news a ULTRA lay we'll as us tool the well MAGMA our which term, also able as to So really be ULTRA foundation to use ULTRA. retrofitted as base will being good deployment can medium

So it's great tool. a

Bank America. Instructions] from Thanks, from next comes Gabe. George Staphos [Operator of Our question

go now line ahead. Your open. is Please

Thanks very much.

Just follow-on. a quick

of commentary the said In terms $XX so was cost, the or about million. category? by just quick think $XX glass. of rest the of imports the follow-on In And I Americas you the on $XX parse segment, million so you or curtailment. million, a Can then

And year? from Andean I think to for glass glass. region so, relative Thank vantage be demand Andres, of anybody if we you. should that your returnable all how you to is be that then glass, the next one-way would do point said think or importing about your in what

Yes.

guidance So, in George, during in in $XX added in was think included that associated in I Americas. the obviously, for was the Again, not the was one that quarter. unfavorable that think guidance, or temporary breakdown it of which question, other revaluation, downtime. that That's call, thing identified inventory And curtailment was elevated was the or the is higher our million original on of project the was thereabout $XX-some-odd something million previous that million cost million before. asset activity. with your $XX the about the we I first the costs our $XX

And growing as Andean -- efforts it's is a X.X% new. there way X.X% glass last year-to-date activity, are and both returnable new into well Brazil. in in the fairly is primarily at and one which even products, of look way, of product premium one we in Brazil, lot is If development going but returnable year as

So premium. of it's supporting the growth

growth -- primarily imports The seeing So to it's we're both. Huawei. in are related

back have for questions. Chris I that, further remarks. to will We final no hand Manuel now With

making you. memorable call third currently a choosing glass. safe, earnings call. remember concludes that is That Carla. and November our moment our note conference X, Thank for Please you, scheduled Thank by quarter sustainable

for concludes your participation. Thank call. you This today's

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