O-I Glass, Inc. (NYSE:OI) Q1 2024 Earnings Call Transcript

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John Haudrich : I think we’ve seen some mix trends too. So for example, we’ve flagged this one last quarter too is that, there is some trade down effect with beer in Eastern Europe. By the same token, we’re seeing very strong market share position for glass in The Netherlands and in Colombia and other marketplaces like that. So I think we got, there’s no one universal answer about what’s going on out there. You see it market-by-market, category-by-category.

Operator: [Operator Instructions] Our next question comes from the line of Gabe Hadji with Wells Fargo Securities. Gabe, please go ahead.

Gabe Hadji : Andres, congratulations. John, Chris, good morning.

Andres Lopez: Thank you, Gabe.

Gabe Hadji : Yes. Maybe much like you are focusing on the controllables, maybe focusing just on the sort of more near term outlook. It wasn’t clear if April volumes, whether on a day-adjusted basis or otherwise were positive for you all in terms of shipments? And then, just confidence level in the near term kind of second quarter view that it looks like from the chart, shipments will be flattish. Maybe we will start there.

John Haudrich : Yeah, Gabe, for clarity, our actual shipments in April were up 3%, okay, that we also benefited from the timing of Easter. If you normalize for the Easter period, it was down about 10% on a per day basis. And that compares to the first quarter when things were down about 12.5%. So we have seen some, some trend in the positive. That’s – but that’s obviously, a little slower of an improvement than what we originally anticipated. So March was a bit softer as Anders mentioned, April was improving, but also maybe little slower than we anticipated with the backdrop of the, looking at the Nielsen data with a little bit of a slower consumer. But as we take a look at that and you see it on that Page 4, in the lower right hand corner, we have calibrated our growth expectations for each quarter of the year for a revised view of a softer consumer recovery pattern.

And so, we believe, with April being up 3% on an absolute basis and then things playing out more on a normalized basis over the balance of the month, we should be in that kind of plus or minus or fairly narrow range of a breakeven in the second quarter. And then stronger volume – reported volumes in the back half as we see that gradual recovery, but also in easier comp against the prior year numbers.

Gabe Hadji : Okay. One country you had talked about the Indian region and Colombia, but we didn’t hear much about Brazil. Again, a lot going on there in terms of what we’re hearing from a competing substrate. It seems like aluminum is maybe better hedged this year or maybe cheaper from a sourcing standpoint. Just as that happens and we get more sanctions and things like that and cost move up. Just curious how long maybe of a lead time you have in terms of the discussions with your customers for pack mix done in Brazil? And then, just maybe current commentary on what you’re seeing. Thank you.

Andres Lopez: Yeah, so the economy in Brazil has been a performing quite stable. So it didn’t go through what the other economies are going through. It’s been okay. Now our performance, or that performance of glass in beer is very solid. It is driven by premium. And just to give you an idea, year-to-date first quarter year-on-year, one way growth is 5.3%, which is well ahead of growth in the other substrates. Now, it is important to take in consideration that when other substrates talk about their demand, they include carbonated soft drinks in one way, which is a segment in which we don’t participate on much. So, so that’s driving a lot of what they are experiencing. But for us, a very important category in the country’s beer and beer is doing quite well. As we said before, the returnability improved over time after the pandemic. So, the percentage of the total volume of beer packed in return our glass increased, and it remains at.

Gabe Hadji : Okay. Thank you.

Andres Lopez: Thank you.

Chris Manuel : Okay guys that concludes our earnings call. Thank you, Emily. So that concludes our call. I would note that our second quarter call is scheduled for Wednesday, July 31st. And as a reminder, make it a memorable event by choosing safe sustainable glass. Thank you.

Operator: Thank you, everyone for joining us today. This concludes our call and you may now disconnect your line.

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