O-I Glass(OI)2024-05-01 16:21Financial Data and Key Metrics - Q1 2024 earnings were 1.29 per share in the prior year period, reflecting softer demand and temporary production curtailments [14][17] - Americas segment operating profit was 176 million last year, with sales volume down 15% [91] - Europe segment operating profit totaled 222 million last year, with sales volumes down 10% [18] - Adjusted earnings for 2024 are expected to be 2 per share, revised from the prior outlook of 2.65 per share due to unfavorable FX trends, higher interest rates, and a higher tax rate [19] Business Line Data and Key Metrics - Beer category showed the most improvement, with year-to-date Q1 year-on-year growth of 5.3% in Brazil, driven by premiumization [8] - Wine and spirits category destocking is expected to continue for a couple of quarters, with slower recovery due to softer consumer consumption [103][26] - April shipments were up 3% on an absolute basis, but down 10% on a per day basis when adjusted for the Easter holiday [2][16] Market Data and Key Metrics - In Brazil, the economy has been stable, and glass demand in the beer segment is solid, driven by premiumization [8] - Colombia is performing well, with mid-teens year-on-year growth, while other markets are experiencing slowdowns [141] - Europe saw improved performance in beer in North Central Europe and wine in Italy, but overall consumption recovery is slower than expected [146] Company Strategy and Industry Competition - The company is advancing its MAGMA technology, with the first Greenfield plant in Kentucky set to start up in summer 2024 [15][21] - MAGMA and Ultra technologies are expected to expand the company's total addressable market by over 30% [95] - The company is focusing on margin expansion initiatives, increasing the full-year target to at least 125 million in funding from the US Department of Energy to accelerate industrial decarbonization technologies [136] - Free cash flow for 2024 is expected to range between 150 million, with leverage in the low threes by year-end [108] Q&A Session Summary Question: April shipment trends and Q2 outlook - April shipments were up 3% on an absolute basis but down 10% on a per day basis when adjusted for Easter. Q2 is expected to be in a narrow breakeven range, with stronger volumes in the back half of the year [2][3] Question: Performance in Brazil and competitive dynamics - Brazil's economy has been stable, and glass demand in the beer segment is solid, driven by premiumization. The company does not participate much in the carbonated soft drinks segment, which is driving demand for other substrates [5][8] Question: Destocking timeline for wine and spirits - Destocking for wine and spirits is expected to continue through the second half of the year, with slower recovery due to softer consumer consumption [26][103] Question: Curtailment activity and its impact on pricing - Curtailment activity is more pronounced in the Americas, with expectations of 10% to 12% curtailment over the balance of the year, peaking in Q2 [57][122] Question: MAGMA opportunities and margin expansion initiatives - MAGMA offers flexibility and scalability, with opportunities in fragmented premium markets. The company has increased its margin expansion initiative target to 75 million related to restructuring and SG&A reductions [124][125] Question: Consumer trade-down trends - Trade-down activity is concentrated in some markets and linked to promotional activity, with some movement from higher-end to lower-end bottles or different substrates [161][180]