O-I Glass, Inc. /DE/ Q1 FY2025 earnings call

• Thanked colleagues worldwide for their efforts in turning O-I around. • Reported first quarter adjusted earnings of $0.40 per share, which significantly exceeded plan due to stronger sales volume and Fit to Win benefits. • Shipments increased by more than 4% compared to last year. • Fit to Win program generated $61 million in savings in the first quarter, with targets of $250 million in 2025 and $650 million cumulatively by 2027. • Americas business unit operating profit improved significantly due to healthier fundamentals and strategic initiatives. • Europe results trended down but were partially mitigated by Fit to Win benefits. • Reaffirmed full year 2025 guidance with adjusted earnings expected to improve 50% to 85% from 2024.

In the Americas, segment operating profit improved significantly reflecting healthier fundamentals and benefits from strategic initiatives. Shipments in the Americas increased by more than 4% compared to last year. In Europe, results trended down due to lower net price and temporary production downtime, partially mitigated by solid Fit to Win benefits. The Americas contributed positively to overall performance with healthier fundamentals and Fit to Win benefits, while Europe faced challenges but also saw some Fit to Win support. Americas likely had a higher revenue contribution percentage due to stronger growth, but specific percentages weren't explicitly stated in the transcript.

• Reaffirmed full year 2025 guidance with adjusted earnings expected to improve between 50% and 85% from 2024. • Maintaining original sales volume guidance but being cautious due to uncertainty related to new tariff policies. • Will reassess 2025 sales volume out of mid-year as trends evolve. • Expect a significant rebound in free cash flow boosted by strong operating performance improvement and lower CapEx investment requirements.

• Uncertainty related to changing global trade policies which may impact short-term demand and consumer elasticity. • Excess capacity in Europe requiring temporary curtailments and long-term restructuring actions which involve consultation with works councils. • Potential impact of energy and raw material price fluctuations on costs.

Q: Can you talk a bit about any prebuy effects within Europe and about the TOE program in Toronto?

A: On prebuy, sales volume was up 4.4% in the first quarter with limited prebuy impact. Regarding TOE, in Toano, there's a clear line of sight to identified opportunities, metrics established, and validation of hypotheses, with rollout across the whole fleet to begin in waves over 15 to 18 months.

Q: Can you give a sense of volume progress by end market and order books?

A: In both Americas and Europe, strong volumes across most categories. Order books are good but uncertainly regarding tariff discussions causes consumer uncertainty. Overall, off to a strong start but with caution due to tariffs.

Q: You mentioned tariffs on aluminum as an opportunity. Have you seen signs of this yet?

A: It's a bit early, some things are supply chain, filling, and contractually related. The opportunities section unfolds over time and isn't factored into current outlook yet.

Q: In Europe, talk about the cadence of headwinds like net price and curtailment costs over the four quarters?

A: Net price impact is front and loaded with less in second quarter and minor in back half. Curtailment costs are front-end loaded as they work to bring inventories down to 50 days or lower.

Q: Review what you're hearing from customers on the spirit side in North America and globally?

A: Staying close to customers, in a wait and see period with no big structural decisions on capacity onshoring yet. Spirits volumes were good in first quarter as past destocking phase, but uncertainty with tariffs remains.

Q: Thoughts on energy hedges related to natural gas, coal, and soda ash?

A: Have very favorable long-term energy contracts through the balance of the year, highly covered. Layering in positions for future years, being judicious about prices. Also working on value chain approach with suppliers to manage raw materials.