OI - Earnings call transcript Q4 2021

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Operator

Good day and thank you for standing by. Welcome to the O-I Glass full-year and Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After prepared remarks, there will be a question and answer session. [Operator Instruction]. one one to yourself limit question follow-up. and Please conference recorded. be advised being this that Please is Instruction]. [Operator would I of to today, like now Chris your over Manuel, speaker to Vice President Investor hand Relations. the conference Please go ahead.

Christopher Manuel

everyone welcome XXXX quarter and Jerome, Call. you, to O-I and Earnings Glass the fourth full-year Thank

John key today discussion business review financial results. and developments led CFO. Today Lopez, our by and Our our Andres we be CEO will Haudrich, will discuss our

available for we and remarks, Q&A host the who this review earnings Please will to start are the our use comments materials Slide prepared Following of GAAP session. the call Andres, those in will on turn non now a included materials. on of harbor like website. call company's the - to X. Presentation safe measures I'd financial disclosure over

Andres Lopez

appreciate I interest your Glass. in everyone. morning, Good O-I

evening, start your appreciate on Last Sales reflected was XXXX significantly. XXXX which strong most flow the Let $X.XX share which year were note, outlook. Fourth Both and our outlook exceptional quarter year with $X.XX recent business Favorable than from production results of we impacted a onset and full-year strategy. I the volume up business and X% volumes high divestiture. excluding pandemic. more over by was commitments exceeded our original rebound X.X% improved which sales level up O-I's thanking of adjusted the at strong XXXX, helped guidance earnings exceeded the the cash share, me team. an [Indiscernible] our earnings volumes focus also $XXX million. per our and engagement, as past close year, we agility, achieve and of execution O-I cash truly by adjusted per us of advance flow free earnings and reported

strong Importantly, nearly inflation quite inflation. prices we shipments doubled, levels, of Higher expected glass heading sustainable pre bit around packaging. our year. given a was into offset a preference cost These average reflecting last selling exceeded premium a consumer for XX% and -pandemic XXXX elevated but

also good along strong benefited was there Earnings initiatives, successful incremental operating our inflation. continued from So performance. margin momentum expansion passing through with

shortly, the to the bolder OI's of liabilities support our a to As structural business, structural we facets strategy. solution continue we actions margin macros advance including organic includes legacy This and all investments optimizing addressing are actions will review our to Likewise, improve growth. developing and structure. to proprietary take we

On the dozen shared have right, we financial a measures. key

solid solid effective As great more reflects you business. progress are progress making for in This XXXX. OI can much see, of and XXXX. execution, we a resulting There during of optimistic we dimensions capable organization are the at is all across agile momentum

strong $X.XX and between improved expect a to should Adjusted earnings adjusted adjusted We improve $X cash flow. earnings share. per to free

of from combination unfavorable optimize portfolio. expect $X.XX We higher despite [Indiscernible] fund anticipated from that an adjusted impact the we earnings FX, as it we our dilution interest and higher divestiture

funding momentum good later. we first John improve on prior performance elevated Excluding free cash exceed that of results. we from expect which expansion should year financial expect adjusted proceeds Reflecting Like-wise [Indiscernible] cash capex is expand outlook, redeployed earnings million. million, as $XXX our divestitures. flow $XXX and strong flow as at quarter least the excludes free funded fully [Indiscernible], from will will we

of shipments in underlying our On Let's which mind, over of glass this years, for our a annual is period. sales when Keep sales adjusted review X.X% pandemic. reflects to been more basis, have demand. five on today's The average about from the which over volume JVs, increased we volumes including divestitures. have stable CAGR move our indicative X trends past Page sales recent course the our as option volumes illustrates chart

the from X.X% just as were shipments onset I in XXXX recovered we've noted, of up As COVID.

improved levels consumer -pandemic glass in for challenging glass. and was pre achieved continued all challenges shifts, quarter despite combined Strong reflects fourth with improved ongoing solid increased inventory as were shipments favorable reflects project sustainability chain ongoing premium reflecting of categories. prior [Indiscernible] markets demand newest supply we operating low an slightly XXXX, peak the Stronger year. amid across and From commercial was record saw of X% preference for activity This than attributes and flexibility as more and a shipments The up d the Importantly, levels. through nearly products, the growth X.X% preference supply, localization asset capabilities. demand America from consumer down

period. was strong robust demand up very will wine served in a by year increased be strong continued foreigners up enterprise. glass up prior a robust more sales January containers, our Amidst from add the continued XXXX. asset we were expect demand shipments of XX% This across that In projects exited Europe shipments the the grow wine equivalent particular, and for Southern will in X% to we than growth new will volume into However, in a as and Europe. X% were The productivity year. year

be growing building early serve that premium XXXX, markets. to online Additionally, categories should are capacity we new in in attractive,

we next X% growth network with [Indiscernible] years, the consolidated our anticipate to the capacity as year across incremental organic comes For X% three per online.

X. Slide to turn Let's

strategy. good our O-I's also exceeded we we commitments, very progress financial advancing As made

objectives In this past achieved of key all year. fact, we our

$XX key currently We create we posted Our in With our highly glass we XXXX million. market. line achieved target our million, validated expansion technologies milestones X X business earnings as revolutionize at Streator the of profitable $XX pilot. will successful new Holzminden. that our exceeded Gen testing Gen model of aim which MAGMA are initiatives critical And we MAGMA, margin to at

campaign our million [Indiscernible] billion XXX as generated X.X more glass reaching glass, than we the impressions, a in rebalance U.S. digital outlook the As people marketing

creative our and advance likes to summarizes and noted are a appendix, off year agenda Likewise, and in page the soft ESG are few. of the EcoVadis by We recognized. much-needed you meaningful in at the efforts effective Sustainalytics, name a invite improvement greater review progress. to the which OI first sustainability we I to of our our this being start ESG

business We sheet. optimize as on progress rebalancing the also by portfolio improving our structure made Balance great we our

portfolio Our advancing is optimization swiftly. Program

Investor As we $XXX lines, Program. by MAGMA up announced will Optimization XX of including substantially initiatives, our discussed which to Portfolio up to funded expansion Day, be million future at

making We legacy stride pension have on reuse great established plan unfunded reorganization to in our few consensual are liabilities. Likewise, submitted plan A the court. weeks reorganization. was Back principle also we Paddock's significantly the position plans. resolving in of for April, agreement ago, legacy the we of an

levels flow our As a result doubled nearly and debt at since is we mid-XXXX. our cash of now free net the efforts, lowest

six establish simple confident XXXX strategic agile as at function our accelerate our of the with continue for I align I'm we with XXXX. to objectives strategic we partnership efforts laid represents our our priorities first two step improvement Investor and completed transformation we organization Accenture. On new our in key the relieve advanced we share a for will a we recent XXXX Finally, services phases Page Hawaii to X, out key managed have firmly Day.

of prices As seek year we spread, favorable to to will the selling intend recover we and of achieve cost impact inflation. XXXX that expand last offset margins, higher

at continue highly successful which least also benefits. margin our million yield of will an should initiatives, incremental $XX We expansion

markets. categories in our grow profitably business strategic to intend we key in premium Next,

including wave will which We currently are projects projects this next increasingly technology. Brazil. will initiatives in customer long-term MAGMA and expansion in technology, our backed expansion underway, agreements. substantially are Colombia Future leveraging utilize the Peru complete All the substantially and year, expansion of legacy Canada by

prior be billion in received will XXXX. We to significant proceeds Remaining Optimization complete Portfolio should our current Program expansion reinvestment. $X.X

afforded We risk liabilities the plans. also resolve XXXX, to in asbestos of pension our intend to first half legacy the

development plan aim Gen expect attractive complete initiatives. Ultra will sustainability pilot. We our X to will validate solution the fully light-weighting next further to profile. over and X glass Likewise, our to In we and plan we few enhance to multi-generation the XXXX, the X optimize Gen continue have We advance already MAGMA Generation years.

believe continued execution, Through aim focus milestones campaign, We end-use and will these that greenhouse Glass critical to to energy expand value. Along of electricity reduce we from we to Advocacy and more increase will stakeholder emissions with deliver continue disciplined many in gas renewable XX% sources. will we our our XXXX these lines, on multiple on by XX% source XX% commitments, X% our categories. the to

Now over to John.

John Haudrich

And XXXX business our plan including to today, I performance, performance topics a well review everyone. with I'll as Page morning, recent Andres. few start as cover priorities, outlook. a on good progress XXXX Thanks X. on financial our financial of

a adjusted represented and the million onset headwind spread full-year XX% a recovered the up prior prior of the shown was This As was the improvement of profit $XXX operating XXXX $X.XX per the left, the from year adjusted year, cost divestitures. Net FX pandemic. business from reflecting on Segment $XXX elevated from well for share. as inflation. OI million earnings reported

increased as up significant shipments other X.X%, volume which levels. production hand, sales excluding the exceeded -pandemic divestitures pre divestitures provided earnings X.X%, Likewise, boost. On a was excluding levels

Our operating margin also continued million reflect from well initiatives. results as the our $XX expansion as benefits performance of strong

As million $XXX of you which FX. earnings for $X.XX profit per -- fourth-quarter operating adjusted can the million, share. see year, $XX we prior on XXXX down adjusted recorded reported right, was Segment from was the

was strong and take increased the to of Likewise, due this production in cost up elevated sales effect Sales from volume prior to price spread X.X% inflation a headwind was began As increases year. expected, that net January prior-year. to X.X%.

elevated margin our logistic were peak in more higher in our maintenance the production quarter, activity expense project offset the higher expansion of fourth and fourth-quarter However, as than by of in initiatives is the the benefit XXXX.

was costs down segment. the from North $XX we on X, adjusted for energy In by information year quarter reflecting primarily Page performance price, million more provided net to of profit benefited million, Results segment FX. our $XX in have from pass-through America. the timely favorable Americas, Moving prior operating fourth

same As in growth Andres concentrated low and Americas. was levels reflecting key markets asset were maintenance down activity, about noted, X.X%, in structure the which inventory elevated shipments

prior In anticipated, higher price in expansion reflecting FX. demand logistics a robust offset the million, good As adjusted headwind category higher increased benefit Europe, Shipments XX% a and costs costs for $X January. and France, starting the initiatives wine than improvement Spain, and production of slightly X% of reflected operating very levels. the our benefits operating Italy. in the from from pending Significantly elevated profit across performance. margin more up levels, million maintenance $XX mostly lower production in Net was year, price was activity segment impact increases

X. priorities exceeded million, Page achieved recent business our outlook. to and financial was flow Turning guidance in most of original our cash all XXXX. We Free $XXX which key

XXXX chart, recent to strong down We days the low record top was from from the levels. flow aim prior inventory achieved on significantly IDS illustrated has we shipments, As year as our five our although improved our cash the periods, billion. reflecting billion below $X.X debt year inventories, exceeded will target Committed liquidity $X.X $X.X above low network. across of ended significantly the Net rebalancing billion, maintain at be required guidelines. well

the to by can net chart, you million reduced year, last see XXXX As lower compared million on and levels. we to debt compared around $XXX $XXX

year defined X.X bank is our high as agreement, ratio guidance around credit by leverage Our ended favorable Xs. our times, to the of which

cash million in $XXX Our Balance sheet on divestitures, XXXX. reflected improvement proceeds totaled free flow improved which and

discussed, we XX As Chapter Andres advanced the case. have significantly Paddock

our and to rebalancing the We year-end $XXX also progress sheet cash good Overall, balance to improve from very declined volatility. included and pension position. reducing XXXX. asset flow which portfolio nearly future million liabilities unfunded Actions reduce we made continue our liability, annuitizing

XXXX outlook. XX. business on I'm Let's our shift Page now to

will range share. $X adjusted to XXXX $X.XX earnings per expect We from

and dollar, number net and adjustment implementing $X.XX U.S. XX% more market will Paddock fund As a open to Trust. we expenses impacted on than dilution earnings incremental negotiated price formulas a including Currently, we're annual share per of our have by mentioned, of contracts. be divestitures, stronger agreements around from long-term factors, sales we

last inflation. benefit price recover the should XXXX of offset cost confident we're spread such, year's increases and As unfavorable

We flows improve for initiatives will on XX% reflect benefits adjusted expect initiatives. some benefits the The up sales expansion the Divestitures offset attributed debottleneck seek be of will right. we to as $XX other volume Shifting and XX% Earnings includes markets. and to impact Paddock. to million from X%. expansion our expect chart by between we growth partially more will than one-time cash ongoing costs of FX margin of also our to key earnings details. Overall, These

equal free cash $XXX $XXX at XXXX flow adjusted expect We should million, of least exceed flow cash and million. or free

communicated. of the These headwind. flows. capital higher factors flow resolution and the a illustrates, around additional while Adjusted compares at interest higher Interest the chart to due of excludes in cash upon trends million cash least Naturally, are measure matters. will expansion working free CapEx impact And projects, million As trust XXXX. to elevated investment higher the payments investment. should taxes we a boost funding which previously will attributed free EBITDA of Paddock $XXX capital in incur is $XXX $XXX increase and strategic tax flow cash tax yield earnings will as favorable of to is new and million. be

Going Canada. Keep should program. our approximate breaking substantially our are project expansion investments and proceeds in in our Optimization be forward, XXXX $XXX Colombia funded we expansion by includes projects Portfolio will and out in which million from underway mind

on impact improving the XX, will we flow return This through available the outlook year, balance debt Page our to On we cash projects of cash million funding of further note to alike. Please reflects our cash free adjusted this So repurchases shareholders least at reduction, flow our XXXX value trust. and share one-time financial Paddock $XXX and that million focus excludes sheet. share priorities. the funding $XXX expansion

program complete of billion have other are or Portfolio which intend ahead XXXX, our between optimize billion, conversion well announced we $X.X We at our initiatives XXXX reviewed, To should an to XX%. XXXX, $X.X date, flow, be advanced million EBITDA completed just and we totaling stages. original target. XX% Optimization reflecting of intend adjusted in to in least cash $XXX transactions free As and we in

have we -risk by de some in of details the eliminating timing with on pension proceeds. further noted, liability XXXX. our line Andres additional of unfunded plan and resolving liabilities provided asbestos legacy We goal Like our will anticipate

reduce further will we leverage. Finally, our

asbestos well pension illustrated liabilities. includes on the our like legacy leverage we right, as measure, past, financial debt, more a are and as introducing which the As net expanded

As see, reducing financial have years. to significant progress we you recent leverage our can made compared

reduce further will leverage XXXX. our financial in We

leverage we should on four than initiatives times the XXXX. This fund of times from cash-flow liability We incur the proceeds expansion by While incremental divestitures to and investment debt of year leverage we up on decline high we impact price Paddock and wrap achieve comments up increases will total end year. of current new this objective with the last begin continued cost more XXXX, shipments the effect, Page prior fund reflects year. trust, will I'll the Paddock business first favorable Xs eliminated. now target also few and X% I'm from over will around to expect strong from to anticipate demand, support X.X as benefit XXXX. strong on the to Reflecting volume outlook. XX. earnings spread year unfavorable price quarter remain will adjusted a take We on that be and increase should year inflation. sales to as free prior our higher our by net offset Total

quarter should Finally, we from initiatives, first Overall, expansion winter last this especially expense expect production do Likewise, was prior higher year earnings will offset earnings anticipate related higher be stable by to since operating to additional severe we levels, costs. year. expect the benefit margin yet weather. activity. impacted project by anticipate our elevated We compared we

turn it Andres. to Now I'll back

Andres Lopez

John. Thanks,

on cash comments we're exceeded advancing with we update. in XXXX pleased our most flows XX. as past and our guidance performance year. original a strong with All up and wrap business earnings Likewise, great recent few made earnings progress me Slide strategies all, our Let in

have entering year. We pointing volume fourth into key all has supported great a as levers continued a by up, new quarter XXXX momentum sales are that strong

articulated at are setup ambitious Investor we aligned what with We have and plan targets which for well a XXXX, clear Day.

a value. are Importantly, catalysts of focused create we near-term on set to

program swift. exceeding sound is is execution, consistently more And the third consumed the our over implemented cash our liabilities and establish resolution will have most O-I expect Likewise, of over as stable that last we next mid-year, complete which and volumes. organization for improving our this of XX% commitments. program and projects Optimization decade expansion our have to of year, which to effective decades or year through moving legacy Portfolio early we a We alone. asbestos past increases support and demonstrated intend After flows capable by agile meeting have in respective years. of sales litigation, we final this XXXX our the to expect much price our a three

are improve we Thank balance questions. higher shareholder confident and your your for you O-I XXXX, flow, about we these a improvement. sheet I'm further we cash Glass, in value. As interest such, adjusted and will strong adjusted earnings, and optimistic expect welcome efforts

Operator

Ladies ask if gentlemen, would and to your like a Panjabi reminder, you first as a the [Operator Instructions] open. line Your line question of comes is Baird, from Ghansham question with

Ghansham Panjabi

everybody. morning, you. Thank Good

Andres Lopez

morning. Good

Ghansham Panjabi

color guidance question, maybe us you're referencing that you give I more build-up guess, the can to for 'XX. for first X% my growth for volume on that

inventories light, customers first of about X% and your X% of shortages, quarter CAPEX seeming and context adding yet in at customers, talking estimated a more pretty lot -- or at big your is are glass so. seemingly we're you Just your

the of went more us what color give And evolution. what through? the offsets would to just in terms Just relative be I

Andres Lopez

So then I which is growth we Americas. primarily repeat event, is year year. reason of complement. and had driven that comments the we X% of last the The to can make a for can you The not by couple all this expect Tex-Mex

seeing took productivity, incremental incremental line actions for performance put be have have in but to We containers. we're production even some able also good that glass to in to the the we volume, demand extensions place

to face. sometimes that plan and glass is the fundamental relationships those have been situations serve to helping really quickly, difficult together, peaks actively last the But reason fairly despite to up issues over we to costumers challenging working of created the I we've very work shows glass The improve regards with the many the we situations are follow. cases, think us strong demand and are best together, years them very shortages, is for with in we Now these strong can. for in few

John Haudrich

to volumes impacted the back. probably early production of a the add get last storm that that And about I year, last so X.X% would on that winter Yeah. year by reference we'll levels, is

system we've investing are out. go of we're inventory the and some capacity we in the additional here low capacity part that production some Obviously, capacity adding adds been at the effect so XXXX. next get early creep the levels, adds can to system. don't We incremental -- record until that into out But big this keep year of really mind, in lines capacity

the will be to increase are a So step change in next you year, great. levels able which see production

XXXX. should X% in in maybe that to production, Let to there. out of get add us to allow And volume that the X% us X% get more back to continue as more from we period the to X%

Ghansham Panjabi

Okay, that's very helpful.

In weather cost Thanks. terms of Europe impact your from U.S., EPS navigated -- have an just in prices for the think, in what recovery, the How on I price the $X.XX on shortage that natural impact it XXXX. and Metro more comments was in extreme spike Is assuming gas conditions in about are you in basis recently you XXXX? these and broadly? and also Gas of also terms energy a

Andres Lopez

Yeah.

we and organized price those said than got on we've we squarely XX% able we price were already. As well late executing more internally. implement increases very of increases last year, focused to been And on

So the we very inflation know will what part. been closely. for the price tracking for XXXX We've be increases most

front will have We able -- believe for us, that to be fully that with we are so stabilizing in the information we seeing we inflation. to of recover us, a

John Haudrich

gives recovered million and negative on $XXX I spread million in practices, the that And price XXXX. in other to was driven $XXX chain material XXXX. inflation but that you and that, inflation XXXX, on exceed will going thinking through kind really We're it be that XXXX that by the year we'll and and in had above what what value raw in XXXX, we the bubbles very plus costs contracts, the recover have we saw that spread incurred get continue with energy logistics labor coverage What to about XXXX. negative was good prices and on saw through about procurement could inflation 'XX, we moving the that it's in inflation in actually we add that of was last tools. we more a we is of in and side

the a pretty in side. have the implemented as contract I XX% believe on basis. local where stand we bid, inflation we good over the cost on So we mentioned And prepared on comments,

we next time. So a have this on believe we in what's year at view point happening good

Andres Lopez

the in we With weather, what to know regards we we at in Europe, be in at have extreme which base have we with Nevertheless, place, the a will very couple able we're to and look operate difficult weather supplier the if next good contracts to winter of for through we the go in markets largest we is going supply. it is months. look comfortable those do markets to

that at line at be circumstance we circumstance, we're emerge, are time. this highest analyze operate to action take we in to if not already The point, presenting natural present. new Now supply one and we smaller but able pressures any we'll are going itself it's gas well. we feel coming or will comfortable either But with, from that where markets

Operator

And Bank America. your from George next of line question comes Staphos of the with

open. line is Your

George Staphos

for Thanks guys. Two morning. on details and year, the me. Good congratulations concluding One and for other growth questions operations. on on the Ron. Hi, the

quantify, activity that project from second operations. how in you in that's us step is question to glass? are what cocktails ready-to-drink that John, talk demand the comfortable particular in as getting -buy, you far on you going comfort. what and about headwind growth operations Why My forecast what your and expect if in 'XX the Andres, -buying you to to can driving for So volume is pre it should into Thank more risk benefit, Europe and be pre big just price was relatedly place would that, XXXX, XQ, activity, not are over. get if headwind it gives in if ahead which was of the a you million was And wasn't on, recognizing and down your at increases so that to XQ, just certainly in could obviously, and and volume a beyond. not saw we that all, goes, that growth it you. you $XX you as any in project

Andres Lopez

Thank George. you

and -buy So about quarter. we previous demand closely first. We've didn't our been Europe tracking the major reasons for pre talk any in see indicating let's

have Now, that our continue, been demand that increases and implemented. we saw price in that quarter

we, point, -buy the believe is, quite it there So at this is if low. it that activity, pre

to is trends comfort in Now, markets, at seeing us about markets. favorable all regards with talk and the demand what our we're point going gives this across I'm general, to

Some of them branding glass they health are They by a And which by And highly the about we're driven two concerned very wellness reason good last is that, consumer preference as of over preferences, we And They're security challenges premium. cost of chains focused global the on have a is sustainability. that for customers seeing fit are increased Glass supply. sustainable an supply the and chains, consumers a years experienced they for supply they're local supply -- fit. very focused the is so all When trading things. localizing and on tool. are products result for with focused good branding. up. and for customers, they're look at on

brand. of production localizing seeing we're So their

we're So localization which more positively impacting volume. and is more seeing example, brands, for our of global

has performing off-premise the and And well statistics and confirmed Third for Nielsen on-premise. by can on-premise is dimension in these glass really looking of CGA at off-premise trends these be for both. been

is help Now, opportunity now high and focus markets. mentioned has across define that, dimension will to businesses work other I to resulted of improvement, us, MPD is demand margins, And the all we're returns. assets because taking of we it us, just which is to on this mix on. for And that helpful activity solid which improve very us improve the and in

early given to sameness, that market. already of there starting to believe the that happen, put our in to to to out project capital project that is started activity. in is agilely activity, large we've the about execution support able we TV a and of for third-party [Indiscernible]. done the cocktails, with quarter. strengthen actions we've through risk Now, these ongoing. we or and Significant to made, And is with been and We starting of that been level decisions reduce new effective will focused -- on and pretty risk some look organized products, for their We regards all glass the to And be products call that fourth and so sea for of actions the to obviously, it's launch progress time execution. -- With That's what regards pretty categories, customers are them analyzing are over been taking brands, has the what to will be a taking develop getting excellence. able projects.

John Haudrich

parts some build-up the of I'll on your there, question George. of other

First growth commercial strong that would very have we say a side, the on I pipeline.

oversold in In fact, markets. we're multiple

drop be we we it then it if probably maintenance So the XXXX can normalize in off it, in high our to project when make that. regard. And comes the can and first then after sell in will activity that activity, quarter and start to

just bit more the give activity of a back-end expansion loaded the a year little to for sense you will Now that. be

a supply equipment ability it through obviously also labor labels Now has all -- been project -- contract is this on get the services. playing in and going activity, chain? I the sense mean, by what's what's impacted to

a re-sequence seen out things but had get the confident to bit system, our and across we of some we've done. project little can delay we've overall, So we're

Andres Lopez

Just which to on complement, all our technology. will first legacy are based XXXX expansions incremental in quarter generate in 'XX, volume

technology half practices -- technology involving operating in so technology we the and practices very second So commissioning well, of MAGMA comes for know 'XX. facilitates that execution The clear the clear are all of that implementation. very the that are the us, that

to So enough have there. time to be organized we get to able get

the a of I described focus your before. for that's identified all So, the think question that why we're is taking important as a one relevant area organization we that and I very and actions

final Now one one I point. can add George,

domestic States. declining is that of largest One have from is slowing beer. domestic of brands the has And for years international demand there the fully decline trend last and beer of in come is offsetting that we but beer, the in beer United which of growth domestic over the few down, pressures had accelerated local

X, last X, of the So over away. very it that's positive largest years, one And our volumes. total fading is pressures had the for we've

Operator

with of question next from Anthony the Your Citi. Pettinari comes line

line Your open. is

Bryan Burgmeier

this sitting Hi, actually Anthony. Burgmeier Bryan is in for

chain $XX costs, shipment What missing positive at costs, Is headwinds in might have are costs, anything looking earnings, or there growth. XQ you flag, would guidance, XQ You're equity, couldn't positive as price be why stronger? non-repeated that be to R&D you million supply storm I of even some the headwinds?

John Haudrich

thanks. Yeah,

the spread have from talked volume single-digit have we side, spread, double-digit On probably that positive the we'll about. benefits

of from winter of year to, and the part the you As because storm spread the on is of energy the year there alluded surcharges. impact prior

production the flag think but are was I starting need expansion that thing, be as key activity. of elements just to be. project some higher to will and year out think million recovery thing where identify up maintenance there. insurance last is, one-time did out up, than we two there ramp it's Whether Our Then Other the a that, there's $X you -- that I that a projects. there get on get

Bryan Burgmeier

seeing? months, Got it. gave apologies revised of constraints or $XX to it over Thanks. guide million indicative be and I our conference CAPEX missed you two you And if any the December, supplier just by what that for guide changed this, constraints at labor may the $XXX you is million the and from last lowered on XXXX, the guidance in

John Haudrich

Yes.

So so the I that's pulled project actual and people chain delay have together we numbers level it's the whatnot. in there a project would out fine yes, in the In differential. then going components planning project the of and three-plus say seen just we're tuning months that that's of with few that of supply part some it planning as in particular, on a plan, activity labor the we of provided the the early to complications. And the contract hard we world ago, get construction month side, all because

So together. things all of it's those coming

than is that being were divestitures we the is regard. Now, project we're bit the favorable rather activity what's the on to outlook? of in same end we than more front-end dilution this of seeing the the what from angle, implications think day, But more the longer-term at of period thinking. what minimal the the loaded over token, a one see -- may it's more in I time three-year normalization at our little

of were so guiding those $X.XX originally $X.XX all of we maybe for items. to And headwinds while

going think, so. probably be $X.XX closer to I it's to or

normalizes end of I the the XXXX that makes all guidance the out think still of periods, and have lot for a that that at it day, we sense. So

Operator

question line the Salvator with Research. Seaport next comes of Your Tiano from

Your line's open.

Salvator Tiano

Good morning. Yes. Hi.

Andres Lopez

Good morning.

Salvator Tiano

Firstly, I the from bit want to portfolio ask about solution incremental a debt and divestitures Paddock. little the from earnings the

So of be the purely first in going but happening year. you year, this that's day mentioned, [Indiscernible] it's the not to

should about What's for headwinds additional So how think EPS remaining? we XXXX?

John Haudrich

easy if incremental that the The Yes. than year, it a have be is answer $X.XX an going and will we that, XXXX. Yes. $X.XX this answer simple into

than little So what more a lower the cumulative originally Paddock And some year middle we assumes lower for Optimization the of favorable, kind bit scale referred is activities. of were expecting. kind this then of as sliding indicated, we the effect and what I than Portfolio previous little of we to on just a that again, bit -- question, the $X.XX were a

Salvator Tiano

Okay, great.

QX will insurance proceeds, was if additional providers in in Before Do help any you on utilities what around million -- year. your or budget with Also you received me us, insurance was weather year? last this remind that you headwind expect mentioned QX? do can $XX you earnings the for settlements

John Haudrich

Yes.

on we're -- of that the potential backlogged, vigorously on involved very there. number number the companies amount disruption, given the side working process last is the that. recovery obviously, insurance of in of So piece, That

underway. So that's still

that And $X million we him. recovered it's won't an question? to I What just it, just XXXX. the too lost of insurance the and as on repeat hang 'XX. quarter quarter was your as that but think would of -- proceeds, hat on upside. was your think, that It I preliminary insurance other working represent we're first the in in proceeds first far were

Andres Lopez

Operator, are we for next ready the one?

Operator

you. Thank

Your Barclays. next with Leithead question comes the line of Mike from

Your line is open.

Mike Leithead

Good guys. Thanks. morning, Great.

Andres Lopez

Good morning Mike.

Mike Leithead

a I question First I to wanted running pretty just function circle to back but make question. out. sounds full of much this first it, your guidance capacity and the shipments Ghansham's year sure it understood is like

wouldn't an so. if of X% serve think year a be grow, they that until your 'XX. How or a in able like or upper to new So my example, wanted want it about investments you're customers year table for are to even way correct on the what kind sounds guess leave going conversation? it? is growth to say customers Is that this Because handling X% come to as the limit your X% the to on in

Andres Lopez

[Indiscernible] achievement Okay our obviously is so the that available. mentioned before and of these we trends the capacity

work also, assets. of I on of more emphasizing have year get some been took implement productivity be significantly, able to extensions. action to we think to all out last we is the our some thing good And existing proactive line

give capacity So some [Indiscernible] able ones serve those events us will the growth. the to together, be to this plus we

the now That's and court of to we that, that major of of we've been agreements. the long-term been is [Indiscernible]in in be in haven't year, Now, those of helping remember, extensions are a by [Indiscernible] operation normal the we so seeing. Europe also line last years. added expansions drivers number place. presented Europe, had what the first for of year part but supports over our right the too. seen endured And with will supported with -- [Indiscernible] XXXX and numbers we particular, our that you X doing we a are one supply we higher growth. We've are the Everyone

aligned from the perspective, So that the that of are customer well timelines needs. with

shouldn't -- it we So problem. a be

all there business Now, And for we brought plan these is which we pipeline analyze the our focus forward, our prudent there now the finding [Indiscernible] the continue is. the to already potential. be we more [Indiscernible], following with to got strong. we on with period. is with pace That that right I Yes, think, opportunities very investment investments. at But, the is regards

John Haudrich

X% the of just winter elements would has the a of the is Andres function the additional from I those extensions. that line recovery in add, reflects capacity growth of the And storm some Yuri

team the I call. whether early hard to productivity working it's that continue opportunity increase to too to and an we'll that make the is But upside. think course, on see provides Of

Mike Leithead

remind ones as for you potentially for that. of just -- are due versus this And fixed your then John then interest. you And Thank think mix assuming Great. Can floating for rising incremental X. X. a us follow-up, funding? debt today the on year? interest quick to just of Paddock about you just for rates What maybe two

John Haudrich

Yes.

than $XXX the starting a looking we're at about floating, we mean, it's of little important include as -- We right looking $XXX or at think less -- that's the lot ago. couple days between million So our kind But XX% is Right overall, floating, floating, a XX-XX mid-year we're is bit on we're of at that. have the U.S. maybe side, so. average curve exposure borrowing rates $XX forward to don't to million. fixed about place now, split where sit. now Paddock and a our half part I a is of assumptions I of -- million a

rate the Now more it's be over there here. from being couple the shorter ends a up million changes there, of dollars, Fed might terribly if term to not but -- we're hikes sensitive it the policy in

Operator

Bank of comes Your the line next from Montreal. Mark with Wilde question of

open. is line Your

Mark Wilde

Good Andres. Good morning, morning, Thanks. John.

John Haudrich

morning. Good

Mark Wilde

the of and can answered you we a little go some [Indiscernible] you've here? Andres, quarter already, give and John in follow you us [Indiscernible] as from sense this Omicron into first saw but of bit

Andres Lopez

you the the quarter? omicron asking first sound bit, were was Yes, little breaking a potential on about think, but, I impact so and

Mark Wilde

Yes.

Andres Lopez

been and employees the perspective. recommended from this protect procedures implementing Well, the all we've active very that are guidelines, to are in designed and

transmits As a we know, lot -- omicron easier. has faster,

the less However, impact it has variants. than previous significantly

you been putting pretty normal pressure footprint. the it's Nevertheless, to across more much global operate our effort. factories. an if we've will, ongoing But able been for the on that's employees, So

this starting I XXX% the directionally think world. factories so move that our appropriately us at to able this for but point drop around and incidence to [Indiscernible] been at is point, the should we've are running

John Haudrich

ongoing -- broader of our to keep local. within over comment quite industries, to on impact shipped what mind just base XXX, of our thing ship is the to pandemic. XXX, to is XX% our local in business and impact And we One of supply compared XX% facilities. is supply-chain the other miles, very

smoothing while with So broader but we've fairly effect, our seen is chain some might over localized. out impact our overall, business months. seen that in challenges, itself, several We've of as the of hear of things, customers in more on supply such, you last

Mark Wilde

I follow-up, high us you will of help from know those my for you've that I protect in gas just place John, wondered as interplay exposure curious, if got your Then that, hedges roll-off, but European hedges some prices. pricing? you to Okay. just that these can with how understand I'm

John Haudrich

period is mature use. thing. have and does new a the to of not job The out time, long-term say very we it's team a But been to of financial tools look long-term continue energy doing business. a would a the manage I we our also contracts process for the that the have manage and across what and fantastic we So for

cost So where stand confident net on about we're energy. we the quite contracted and of

Operator

line Your with White of next from question comes Kyle the Deutsche Bank.

Your line's open.

Kyle White

Thanks in more price markets prices? to of broadly consumers. percentage you price some your pledged way and Any are with terms of here good taking to a about replacing for higher characterize question. your end-markets? concerns end morning. just sensitive Any increases what the with to such Hey, numerous spirits Can of being talk higher champagne? value markets, elasticity lot as my of Obviously, your

John Haudrich

we out ago the I time of the last of is if been would more lot the in the particularly lower-end our tend that to of don't It's a more I the value on the what great mid-tiers. categories. of there But but recession the moving my And have in that system. categories, over do well. of most down of during in, on where say -- premium XX top some has to -- a more know right head, businesses they years numbers value be pretty Well, I cycled to U.S. saw trade the was some and

are COVID, home. in People we're of pretty at world state. really good remained important. affordable So especially And stuck have a this in luxuries

traveling And is something so nice good to you're everything and or scotch inflation. of do continue bottle in the that like things to a a even whatever else. probably have world you much or can understanding wine not of amid

Kyle White

serve to America it. of levels some efficient to an your ability customers. levels, Got ability you inventory Then to particularly in s which impact Where the maybe maybe of more now in mentioned your and them terms your inventory in or you more will get was here are February, record having manageable have levels? low

Andres Lopez

Yes.

we've a significant share inventory that the is lower why the our those levels planning, those processes, because to in calls around business world. IBP that plan influence or planning, previous we So demand essentially we're the mentioned on practices having has before been working business. the reason in planning, integrated company, supply We ability on implemented seeing sophisticating

together is that help of inventories. coming lower all to very So well us well, perform with

be be maintain be lower them those the at reusing we'll will to further. expectation continue able over time. levels And that able to Our we'll inventories

John Haudrich

last The ideas able team do continue sustain to there's of still can better. years. a continue systems little It job, create that two be XX% And mentioned, to tools to will done new our and but We time better. do balance, bit opportunity. take that we're is a to over the Andres putting down great has in as going be to and to

Operator

Adam Your next question Josephson KeyBanc. of with comes line from the

open. is line Your

Adam Josephson

Thanks. Hope Good morning, everyone. you're well.

Andres Lopez

Good morning.

Adam Josephson

level expect your it you or other a to XXX-plus given lower morning understand how mentioned Andres. anything of Do I to just just Hi, help to neglected then And source pension I of items some relative else use, parts the think and and XXX-plus. capital. working equity one me about with guess a normalized a dividends. that how I'm John, cash much? that should some we respect operating be cash-flow of trying on about? Can the guidance to and of flow, moving I that operating ask question you so

John Haudrich

Yes sure.

mean, of that, of the and building a the up AP even -- give was you AR were cash, -- XXXX business of net right? just use color up me receivables bit we and And we effect little recup In a use here, a cash. recovering. ended of I there. big was was Let

going the going into then, as But recovery right? the won't of well, year. inventories collecting very Now, offset much that those big as we'll on be growing was because XXXX, nearly the volumes receivables down because be

make source an a a for good bit little the a pension where a a little the show be because mostly primarily the settling XXXX inventories here the us prior will we even matters. year is can on really bit big gives then flat, we business that was because Taxes relatively interest inventory have situation We maybe that be Paddock. because of So amid the there out to stay side. some a opportunity of story cash, or in of little of will pensions up last that higher the year payments of And progress foresee.

that and things year-over-year pension time, million spike point that basis. All big are had $XX about payments XXXX. up will we on in XXXX in $XX million payments probably pretty of we at time. at And much So and in this a in drop between pension really in to don't $XX the other foresee a comparable point pretty --

Adam Josephson

I the Andres, about visibility seems up as out fourth just into shipments, mean 'XX. limited as volume turned I'm What your you would they to be flat X.X%. And, just the expecting it thinking on John. you went say volume does, because quarter issue. -- your on Thanks, why

the February as comp pretty quarter Yuri, So March up the a you're later January three. further winter have expecting deceleration and nonetheless in then storm in easy was you progresses, like but given a It seems deceleration and year.

different trying the quarter. demand, to much fourth just So understand what was you so into in really it visibility how than you actually much and why have were expecting

Andres Lopez

is shipments Italian incremental Prosecco the France champagne I think and the [Indiscernible] saw for in continuously of wine driver improved wines. demand the and key that we

strong part that into down this those point the is continued years soft. a quarter. a we first What were Remember those of recovery they categories. slowed of were categories Now, than expected. and are ago, two lot full coming we those categories it it The more and extremely seeing at is interesting

Our projections and our in sustained to be able we time will as that incorporated better.

level strong limited And the driving which seeing demand, and the having by packaging beer largest is the alternative oil strong two, Europe. we combine have Europe, beer that Southern capacity. is have very The we shipments largest in in of you other when performance in just ahead a the performance see significant the countries factor in very it's markets, where of presence strong is that our very they're primarily the growing they incremental we're -- demand is of Europe,

to that. we not, got And available or deal mix or we So with all the the on capacity inventory not. how have we moves, have depending

influences is planning the and will fine-tune that as able -- So projections. for and that we our most to healthy, part, very a those into year demand the go we be

John Haudrich

the necessarily I looking before, things, think strong strong. a I demand remain supply a that and -- system our our profile understood mentioned has we put been side. challenge on at been that, chain strong, to how that build going and been and would The has customer has off has the To has in not been cap say, it's it's on but

it and down because related hard it's items of supply to read was were we quarter, third all kind The that. chain and of

that side, wildcard production think forward, out, to our I to that the is out Going the do creep strong ability capacity more and in demand. it there get more serve

And there's side a so there. through and not it's those read trying the couple really wildcards demand on we're that variables to

Operator

comes question the next Your from Mike Securities. with line Truist Roxland of

open. line's Your

Mike Roxland

much. Chris, progress. the very Thanks the congrats continued And and on year Andres, John,

Andres Lopez

you. Thank

Mike Roxland

question on Just you -- John, for the inflation. a quick on maybe

any inflation such cover, Is much beyond with capture you expect? structured inflation only to -- the -- not Are the you're XXXX? to expect contracts but XXXX, you expect what higher you inflation and can mentioned contracts you XXXX into expecting XXXX going You incremental that well. above but than respect that were your as

John Haudrich

know is and as know our stipulate, that say positions use. contracts financial Yeah. they we well What I and we what as we our would

cost recapture on months. for appearances, to of be line and going to the us sight XXXX last is able XXXX good So unfavorable few over I that in And consistently couple that offset of heard you've inflation from XXXX the cost public believed last we're is the if spread we pretty think inflation.

So a than could inflation we I good it our position on will there. view if spread think The be conservative. anticipate, in be better -- we're proves be to

pricing is marketplace. I And where out of to we that some do continue in the course marginal level think it's of at. still

play out. see how And those dynamics two we'll so

Andres Lopez

than conversations But we it be goes believe we have, predictions we this to inflation. preserved. make we'll that clear happens, the if won't be our point with ourselves able projected with that that have currently inflation if back. we we in are And absorb of at pressure higher the all customers, Because information our

John Haudrich

I and And XXXX, into said being what builds ended thought had We comment but comments. the -- builds was business. in what XX% going think to last the would heading we out double off offset time, seen we the -- be up prepared we it that the than the historically of inflation over that just it of more that commercial maybe course at shows over flexibility you of year

we've capability these working dynamics. so we good got a there that's and through And are how

Mike Roxland

Got appreciate color. it. the I

quick on the inventories. one Just question

the demand, mentioned limited being. You for have year, at shipment keep want a you least X% high have inventories this you is to grown you capacity time But lean.

to think you and Why Given customers pandemic could not maybe higher, do a the this saying, it's come could transitory run evaluate, inventories to the inventories, XX% coming supply chain? do current we'll been recently? logic lean X% supply able maintain able side not, future in that at What and very need inventories other prudent look back the say you at to issues level, continue higher? or or to of risk being What's chain you quite. logistics obviously, supply some at out lean as maybe have the of be

Andres Lopez

in -- business a we have the this processes, can be wrong right to If we have all Well, tools, and place. lower inventories practices than with and

able Now, to to going take the be are demand. have the we're making us investments ones that are incremental to

growing be of want need for meet but the chain, to larger able we the efficiencies the capacity glass containers. to supply So we demand

are of expansions part So we And We're in it. you that Andean that's at the to we at forward moving the with early look projects plan. of EnCana. the then, we how business as be the stages presented planning

Operator

question your line RBC Markets. last the Capital comes of And Viswanathan Arun with from

Your line's open.

Arun Viswanathan

dollar a just Thanks Great. impacts for made 'XX. you about I for on to question. my couple up earlier comments the of follow wanted taking

price you be expect X.XX% to 'XX. the but million sounded fully were behind in your it cost And it 'XX that about that saw like inflation recover sounded like above for you would 'XX. on So you $XX in

X%, range that just, so So given your is around your assuming of or EBITDA X.XX%, say right. it pricing. And I about you'll of volume like looks then $XXX million like that get sounds it's right think guess, in is outlook or Is about right. that million would million $XX Maybe EBIT be the $XX that that to $XX million, to full for the your up year, way $XX right. to is that it?

John Haudrich

So right. and pricing not But the But communicate spread, what your thinking price going the purposes. way for is competitive specifically the of the top is way the to math we're we're the on it getting doing point you're of about on logical. you're top-line

as As on be indicated the like $XX that EBITDA sorry. high I'm improvement on range something be probably far the EBIT side, the that. might I the of the think side, it'll like you million had or more on EBIT end

that. correct me Let

that mid-to-low right. It range. range of of in might you're You're be the the they're, mid-part the kind saying

Arun Viswanathan

lot. a Thanks Okay.

Operator

call call. to question and the closing back answer concludes That I'll you. of session Chris Thank today's hand for the any remarks.

Christopher Manuel

XXXX that That memorable a remember quarter it for choosing scheduled XX. call is you. safe, by in glass. Thanks And our our for first events today. participating Please April our will make sustainable conclude call. everyone moment Thank note to

Operator

concludes Thank full fourth you. And year quarter XXXX O-I that call. conference Glass and the

disconnect. may now You

O-I Glass (OI) 2 Feb 222021 Q4 Earnings call transcript