Hello, welcome to the O-I Glass Q1 2023 Earnings Conference Call. My name is Alex, I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation, you can press Star followed by One on your telephone keypad. If you'd like to withdraw your question, you may press Star followed by Two. I'll now hand over to your host, Chris Manuel, Vice President of Investor Relations. Please go ahead. Thank you, Alex, and welcome everyone to the O-I Glass Q1 2023 earnings call. Our discussion today will be led by Andres Lopez, our CEO, and John Haudrich, our CFO. Today, we will discuss key business developments and review our financial results. Following prepared remarks, we'll host a Q&A session. Presentation materials for this call are available on the company's website. Please review the Safe Harbor comments and disclosure of our use of non-GAAP financial measures included in those materials. I'd now like to turn the call over to Andres, who will start on Slide 3. Good morning, everyone, and thanks for your interest in O-I. We are very pleased to announce exceptionally strong Q1 earnings, which significantly exceeded prior year results as well as guidance. Last night, O-I reported adjusted earnings of $1.29 per share, which was more than double prior year performance and represents record Q1 results. Adjusted earnings benefited from very strong net price realization across the enterprise, as well as from our margin expansion initiatives. Likewise, operating performance exceeded our expectations despite disruption from a number of external events. As expected, sales volume was down given challenging prior year comparisons among other factors. In addition to very strong results, we continue to advance our strategy and efforts to improve margins are all ahead of plan. Importantly, our capacity expansion plans, the technology developments for MAGMA and ULTRA, and our deleveraging actions all remain on track. Given very strong Q1 results, we have increased our full year 2023 business outlook, and now expect adjusted earnings will range between $3.05 and $3.25 per share. We are also providing Q2 guidance and expect adjusted earnings will range between $0.80 and $0.85, which is a solid increase from last year. John will expand on our financial performance and outlook a bit later. Let's move to page 4 and discuss recent sales volume trends. Entering the year, we expected Q1 shipments will be down some given a very challenging prior year comparison. As you can see on the left, volumes were up a robust 6.4% in the Q1 of 2022. During that period, shipments increased as we recovered from prior year global supply chain challenges. Likewise, customers secured glass inventory at the onset of the Russia-Ukraine war, and we shipped out of inventory in some markets, given very strong demand. During the Q1 of 2023, actual shipments were down about 8% from last year, which was softer than we originally anticipated. We expected volume will be down 3%-4% faced with a challenging prior year comparison amid record low inventory levels, especially in Southern Europe. In addition, shipments were impacted by temporary events such as general strikes in France, civil unrest in Peru, and flooding in Northern California, which we believe represented around 2% of our decline. Volume was further impacted by some customer destocking across the supply chain, as well as softer consumer demand in a few markets, which together we estimate accounted for an additional 2%-3% of our lower shipments. These trends were most notable across the mainstream beer, food, and NAB categories in North Central Europe and Mexico. While there are many moving pieces here, we believe underlying demand was down about 2%-3% during the Q1. Looking at the segments, volume was down about 5% in the Americas compared to 3% growth in the prior year quarter, as civil unrest in Peru and flooding in Northern California contributed to lower volumes. In Europe, shipments were down 12% compared to 10% growth last year. Importantly, we remain oversold in the wine category across Southern Europe, yet the social situation in France, punctuated by weekly strikes on pension reform since January, has strongly penalized our results in that market. Overall, we now expect sales volume will be down low to mid-single digits in 2023. While we will contend with modestly lower shipments this year given macro pressures, we expect long-term glass demand will continue to benefit from key mega trends such as premiumization, health and wellness, and increased interest in sustainability. As we look to the future, we believe glass demand should grow between 2% and 3% a year across the key markets that we serve, as illustrated on the right. We have established another set of ambitious and achievable objectives to advance O-I's strategy in 2023, and we are off to a fast start, as shown on page 5. Q1 segment profit margins topped 22% and benefited from $180 million of net price realization and $37 million of margin expansion initiative benefits, which included very good progress in North America. While we expect that performance will be front-loaded in 2023, we are ahead of pace for these key efforts and expect upside benefits. Our plans for profitable growth also remain on target. The new line in Canada is now operational, and our Colombia brownfield should be online late in the Q2. We have kicked off our next expansion projects in Brazil, Peru, and Scotland, which should be operational next year. Our first MAGMA greenfield in Bowling Green also remains on track and should be commissioned around mid-2024. Importantly, MAGMA development is proceeding well, and our first ULTRA bottles are undergoing market testing, with final qualifications expected in the Q2. Our ESG and glass advocacy efforts are progressing well, and net debt leverage should end the year comfortably below 3x levered. I'm highly confident these efforts will advance our strategy as we continue to transform O-I. Let's turn to page 6. Certainly, we are happy to report strong performance and solid progress advancing our strategy. We are also proud of how our transformation is having a big positive impact on O-I and the communities in which we serve. As you can see in the middle, we recently celebrated the official groundbreaking for our first MAGMA greenfield plant in Bowling Green, Kentucky, which will serve the growing spirits category as well as our O-I's distribution business. In France, we completed a sizable investment at our Berre plant that will significantly reduce our CO2 emissions. We are partnering with many customers and communities to increase glass recycling across the U.S., and our progress in ESG has been recognized by EcoVadis, Sustainalytics, and Newsweek magazine. Finally, we have launched a number of award-winning and disruptive offerings as part of our expanding new product development effort. These are just a few success stories as we continue to transform O-I and benefit the communities in which we serve. Now I'll turn it over to John to review financial matters starting on page 7. Thanks, Andres. Good morning, everyone. O-I reported Q1 adjusted earnings of $1.29 per share, which has significantly exceeded both prior-year results and guidance. As noted on the left, we posted significant year-over-year improvement across a wide range of financial measures. Earnings increased in both the Americas and Europe as segment operating profit improved at $398 million compared to $231 million in the prior-year. Higher results primarily reflected strong net price, which is consistent with broader market dynamics given unprecedented cost inflation over the past few years. Around 70% of this improvement related to recovery of prior period inflation. This includes contracted price increases this year on long-term agreements that recover inflation on a lagging basis, as well as the annualized effect of last year's price increases and the benefit from recently renegotiated long-term contracts in North America. The remaining 30% of our higher prices pertain to new increases on open market sales this year, which offset the incremental inflation we incurred in the Q1. Strong net price also reflected our favorable long-term energy contracts in Europe. Segment profit reflected favorable operating costs as earnings benefited from very good factory performance and our margin expansion initiatives. The Q1 was the second-best manufacturing performance over the past five years. Inventory revaluation contributed $35 million or $0.15 per share, which offset the impact of elevated project activity. As Andres discussed, sales volume was down from the prior year. The Americas reported segment operating profit of $176 million, which was up nicely from the prior year. Earnings benefited from good commercial contract execution while sales volume was down. Solid operating results mostly offset higher costs due to elevated planned project activity in Colombia and Canada. In Europe, segment operating profit was $222 million, up significantly from the prior year. Higher selling prices, favorable operating performance, and inventory revaluation boosted earnings while sales volume was down. The chart provides additional details on non-operating items. Actual Q1 performance significantly exceeded our outlook. To better understand these dynamics, we have provided a high-level reconciliation between actual results and guidance. As you can see, solid commercial execution drove most of this upside. Actual gross price realization exceeded our original estimate, while elevated cost inflation moderated some. As noted, better-than-expected operating performance boosted earnings along with a lower tax rate, given stronger earnings and favorable regional earnings mix. These benefits were partially offset by softer-than-expected sales volume, given macro pressures. Yet again, the company delivered strong earnings and margin improvement despite a highly volatile macro environment. Let's move to page 8 and discuss our business outlook. We have updated our full year guidance, given very strong Q1 results. We now expect adjusted earnings will approximate $3.05-$3.25 per share, up from a prior outlook of at least $2.50 per share. Likewise, our Adjusted EBITDA guidance has increased to more than $1.47 billion. Overall, we anticipate continued strong net price as well as good operating and cost performance, while sales volume will be down modestly this year. We have also increased our cash flow outlook, and we anticipate our net debt leverage ratio will end the year comfortably below 3x, as Andres mentioned. Looking at the Q2, we expect adjusted earnings will approximate $0.80-$0.85 per share. Results should be up from the prior year due to favorable net price, yet sales volume will be down modestly. Likewise, operating costs will be elevated as we commission new capacity, and we will see unfavorable inventory revaluation as the prior year benefit will not repeat. Furthermore, results will reflect higher interest expense. While Q2 results will be up on a year-over-year basis, we do expect earnings will be down some sequentially given record Q1 results. This is due to a few key elements. First, the benefit of inventory revaluation will not repeat in the Q2. Next, we expect incrementally higher operating costs as we commission new capacity in Colombia. Finally, interest expense will be up reflecting the progression of higher rates. These elements will be partially offset by seasonally stronger sales volume. We are taking all the steps necessary to drive upside performance across the operating leverage we can control. Yet our outlook is intentionally conservative on the balance of the year given elevated macroeconomic uncertainty, especially in the second half of the year. As a result, we intend to provide regular updates on our business outlook, especially our cash flow guidance, as we gain more clarity on buying and working capital levers. Overall, we remain optimistic and expect strong performance in 2023 and continued improvement in 2024. Moving to page 9. Certainly, Q1 results were exceptionally strong. While this past quarter was unique in some ways, we have been hard at work over the past several years building the engine for sustained earnings and cash flow improvement. We established a simple, agile, and effective organization supported by advanced capabilities and new operating systems like integrated business planning. We improved our business mix and structure. O-I exited non-strategic operations and shifted away from low profit categories. We reduced risk by resolving legacy asbestos liabilities and lowering debt and pension obligations. Our margin expansion initiatives have delivered over $350 million in net benefits since 2017. We expect continued benefits for years to come, including improvements in North America. Our margins in Europe have improved consistently since 2015. For the first time in decades, we are investing in profitable growth that we expect will boost future earnings by more than $100 million once fully implemented. After several years of meaningful R&D investment, we are now at the forefront of deploying breakthrough innovations such as MAGMA and ULTRA that we believe will reduce our operating costs and support future profitable growth at lower capital intensity. Over the long run, we expect continued earnings improvement driven by profitable growth, generally favorable net price realization, and continued margin expansion initiatives. Likewise, we expect stronger cash flow due to the combination of higher EBITDA and expansion at lower capital intensity supported by MAGMA. Turning to page 10. This engine is solidly in place and generating value. As you can see, we have delivered consistent performance improvement over the last several years. Adjusted earnings is up, we have meaningfully improved the balance sheet and capital structure. This favorable trend reflects a comprehensive approach to enable sustained earnings and cash flow performance across all key operating levers. As a result, we have either met or exceeded street expectations for 13 consecutive quarters. Importantly, we are confident our efforts will enable sustained earnings and cash flow improvement in 2024 and into the future. Let me wrap up by covering our capital allocation priorities. I'm on page 11. Improving our capital structure remains our top priority. As noted, we expect leverage will end the year below 3 x, and we will continue to reduce leverage consistent with our glide path to 2.5 x leverage over the next few years. Our second priority is to fund profitable growth, including our current $630 million expansion program. Returning value to our shareholders is our final priority. In addition to our ongoing anti-dilutive share repurchase program, we may consider reinstating a dividend or additional share repurchases as we get closer to our capital structure objectives. Back to Andres for concluding remarks on page 12. Thanks, John. In summary, we are very pleased with our Q1 performance as adjusted earnings was more than double prior year results. In addition to very good performance, we continue to advance our strategy. With a strong start to the year, many of our key initiatives are tracking favorable to plan. We have increased our full-year business outlook, reflecting excellent Q1 results. Likewise, we expect continued earnings improvement in future years as we leverage the strong foundation established over the past several years. Finally, I believe O-I represents an attractive investment opportunity as we strengthen our financial profile, successfully execute and leverage our transformation program, enable long-term profitable growth, advance breakthrough technology and innovations like MAGMA and ULTRA, and further leverage our sustainability position to winning the new green economy. We are confident this strategy will create value for all stakeholders. Thank you, and we're ready to address your questions. Thank you. As a reminder, if you'd like to ask a question, you can press star followed by one on your telephone keypad. If you'd like to withdraw your question, you may press star followed by two. Please ensure you're unmuted locally when asking your question. Please limit yourself to one question and one follow-up question before reentering the queue. Thank you. Our first question for today comes from George Staphos of Bank of America. George, your line is now open. Please go ahead. Thanks, Alex. Hi, everyone. Good morning. Thanks for the details, Andres and team. I guess my question to start is, given the volume that we've seen this year and understanding that there are lots of things that have contributed to the weaker than expected volume, does it change at all your outlook for your deployment of capacity into 2024, if at all? Relatedly, you show Euromonitor data, which shows various, you know, growth outlooks and shipment statistics to date. If I had your top five or 10 customers on the line right now, would they also agree t hat their use of glass would be growing 2%-3%, Andres. How would you think about that? Thank you. Thank you. Thank you, George. We don't have any concern about the utilization of the capacity that we are building at this point, and we'll still going into next year. There are multiple reasons for that. For example, if we look at the new capacity in Canada, that is to support localization of global brands which are already there, in terms of volume. We don't need to create a new volume in that area. When we look at the Andean countries, we've been importing a lot of ware to be able to sustain those markets. For all purposes, the slowdown that we're seeing at this point in time, which is temporary, will only offset those imports. The volume remains very strong. As we go into the future quarters and these recovers, we're gonna be able to utilize that capacity in full. The same happens in Brazil. In fact, Brazil continues to be very strong for glass at this point, and imports are very high by primarily by multiple players. We are importing very little in that market. The market itself is missing a lot of capacity to be able to supply the demand. When we look at Scotland, it is to serve a growing segment of high-end spirits. We feel very comfortable. The new MAGMA line is going to serve the spirits business in the United States also, which is growing quite well. We're very comfortable we're gonna be able to utilize this capacity going forward. With regards to the Euromonitor and the projections, we talked before about the glass demand fundamentals. They're very solid. They're very different than they used to be. The consumer preferences favor glass consumption. We feel comfortable with those projections having been a fair representation of the market. Your customers would say that. Go ahead, John. Sorry about that. Just to add a little bit there is, keep in mind that for the expansion that we have is substantially covered by long-term agreements. I think that backstops the expansion programs. Yeah. These expansions are responding to the requirements of those customers. Right. Okay. Just clarification and a quick follow-on, and I'll get off the line here. Your customers would say they expect their usage to be growing 2%-3% in the relevant categories. John, what do you think you can do on an ongoing basis in terms of operational cost outs the next few years, again, on an annual basis? Thanks, guys. Good luck in the quarter. In some cases, that growth is even more. It all depends on which customer we're talking about. Yeah. Okay. Just to build on the last point, as George, you know, just through looking at our capital allocation and the amount of CapEx and things like that, we're still having to say no to a number of expansion project opportunities with customers over the long term here. I think that there's still pent-up demand on the ability and desire for us to grow capacity with them to support their growth. I think that underscores their support of the substrate. As far as the cost out goes is, as you look over the last several years, we've, you know, averaged $50 million-$75 million, I would say, in just, you know, our margin expansion initiatives. We bumped that up to $100 million this year because of the added focus in North America that covers a wide range of elements. I think that for the next few years, we probably should be on the north end of that range too, because, you know, the improvement, the fundamental improvement of the cost takeout margin expansion initiatives has legs for many years, as I mentioned in the prepared comments. I think, you know, the opportunity for continued margin improvement in Americas is a multiyear process. I think we got a few years here of very strong cost and margin improvement opportunities. Thank you so much. Thank you. Thank you. Our next question comes from Anthony Pettinari from Citi. Anthony, your line is now open. Please go ahead. Hey, good morning. Just sort of following up on George's question. You know, I think in the past, you've talked about being around 5% oversold globally. I'm wondering where that stands now following the 1Q, you know, slight slowdown. Separately, I think you've talked about maybe around 5% of European capacity being removed last year. I'm wondering, you know, where that stands now. Yeah. Let me talk about the capacity in Europe. Capacity was removed. Some of it is coming back. The European market has been growing steadily year after year, at a pace that can consume the capacity, not only that one that is coming back, which is just partial comeback, but all the new capacity that has been implemented. Okay. Then in terms of your oversold position globally, I mean, is that sort of in balance now with the updated volume forecast, or just how should we think about that? Yeah. The dip we're seeing is a temporary dip. Our projections that we share in I-Day remain valid. At this point in time, we're gonna go through this temporary pause while we're building, and then it will come back because the fundamentals remain the same. We feel our projections are accurate, and there will be a. Okay. That's helpful. I'll turn it over. Thank you. Our next question comes from Ghansham Panjabi from Baird. Your line is now open. Please go ahead. Thank you, operator. Good morning, everybody. Morning. You know, some of the big beverage and food companies that reported thus far have pointed towards the consumer in Europe starting to, you know, exhibit elasticity and also trade down dynamics in purchase patterns. Are you seeing something similar at this point? Just more broadly, how do you think your portfolio is positioned against a lower consumer spending dynamic globally? Yeah. The, we're seeing mixed signals as we listen to the earnings releases or on conference calls from multiple companies. From our perspective, the underlying demand is going down at this point in time primarily because of supply chain de-stocking. I think it's early to determine what consumers are doing. At some point they might slow down. We'll see what that is. So far for this quarter, we've seen a pretty drastic supply chain de-stocking. That's what driving the underlying demand. Yeah. I would just add there, Ghansham, you know, not having a crystal ball on that, as we indicated in our prepared remarks, we've just taken a conservative view of the back half of the year on the financial performance side. In the event things prove slower, I think we're covered. In the event things, you know, bounce back because this is a inventory de-stocking and things normalize, I think, you know, we could benefit on the upside. Got it. As we think about, you know, earnings for 2023 being almost $1 higher than in 2022, I know it's very early, but as we update our models for 2024, what do you think we should keep in mind as it relates to potential headwinds on a year-over-year basis? Then related basis, you know, at this point, do you see a path for earnings in 2024 for O-I to be higher than what you currently see for 2023? Yeah. Yeah, for clarity, I think at this point in time, Ghansham, and consistent with your comments just a few minutes ago, we do expect 2024 to be higher than 2023, even against our updated guidance there. You know, while sales volume right now is clearly a headwind, due to the macro pressures, we would anticipate good volumes next year. There could be a bounce back effect, but let's see what happens there. Even without that, we are adding much needed new capacity, as we mentioned before, and that should provide, you know, good, accretive growth for the company. Likewise, again, back to the previous comments, we're confident on, you know, margin expansion initiatives, especially considered, you know, the tailwinds on the recovery in North America. You know, while we're not counting on continued strong net price, we've had, you know, the last seven years, we've had to pay, you know, favorable net price, six out of those seven years. Even with that said, you know, we're still facing 6%, you know, call it 7% or so cost inflation this year. As you know, 55% of our business is under long-term agreements with price adjustment formulas that will kick in to cover that next year. That's a good, a good boost also. Now, we don't know what inflation looks like. We expect it to moderate, and we don't know whether other, you know, commercial activities could be. You know, overall with those elements, we're pretty confident that 2024 will be higher than 2023. I will add to that the operational performance continues to improve. As John described in the opening remarks, this has been one of the best performance, the second one in the last five years. This is responding to all the capabilities that we built, and that is expected to continue delivering improved performance over time, which will impact 2024. Got it. Thanks so much. Thanks. Thank you. Our next question comes from Gabe Hajde from Wells Fargo. Gabe, your line is now open. Please go ahead. Andres, John, Chris, good morning. Good morning. I was hoping, maybe you could give us a little bit of clarity on the Q2 bridge. I think, John, you mentioned $35 million of inventory revaluation benefit that occurred in Q1 that would not recur in Q2. I think you talked about elevated activity across the system being a headwind and then partially offset by seasonally higher volumes. Maybe if you can put a finer point on some of these other items and if I missed anything. Thank you. Yeah. Yeah. Some of the bigger pieces, moving pieces there that will be, you know, sequential headwinds, so to speak, if you wanna call it that, is probably a $0.25-$0.30, you know, change in inventory revaluation. That's the biggest component that comes through. The elevated operating cost because of commissioning new capacity and also we have kind of a large wave of maintenance activity is probably $0.10, probably closer to $0.15 year, you know, quarter-over-quarter headwind. Then as we look at interest expense, it's probably another $0.10 at least, you know, as we stand here today. Yeah, we'll have seasonally stronger sales volume, you know, that'll partially offset that. You know, those are the big moving pieces. Okay. I guess just, again, I appreciate it's April of 2023, but you guys are talking about earnings being up next year. I'm interpreting that as EBITDA. I guess as we translate that down to cash this year, I think was supposed to be peak for CapEx. If I start with the $175 million and assume kind of EBITDA is, I don't know, up $20 million or $25 million or whatever the number is, CapEx being down, call it $75 million-$100 million, are there any other cash flow items that we should be mindful of? I mean, is there anything with working capital that will be required for the business? Yeah. I mean, it's. You know, without getting into specifics, it's like you said, it's a little early to get into the numbers per se. You know, if you take a look at some of the moving pieces, obviously we've got to take a look at our capital plan and, you know, whether there's any adds or any adjustments, whether that's the level of maintenance spending or the strategic projects we have. That's still a little bit in front of us. Now on a working capital side, to the degree that you do have sales volume growing, obviously you will have to, you know, support, you know, that through, you know, receivables and inventory. You know, those are all moving parts. I think, Gabe, it's a little early to give that, the texture of 2024 cash flows. Fair enough. Thank you. Thank you. As a reminder, if you'd like to ask a question, you can press star followed by one on your telephone keypad. Our next question comes from Arun Viswanathan from RBC Capital Markets. Your line is now open. Please go ahead. Good morning. Thanks for taking my question. Just curious on the volume outlook. It does seem like, you know, you guys are capacity constrained. We've been hearing actually that the consumer is kinda, also a little bit weak in certain areas and certain regions. You know, you described the potential for a snapback next year. Is that dependent on a better macro environment, or how are you thinking about the volume trajectory that you are seeing for, you know, the next little intermediate term, especially given your capacity additions? Thanks. Yeah. Yeah. Just for clarity, I think our volumes will, you know, should be up next year irrespective of any macro snapback, so to speak, because, you know, the majority benefit of our expansion program right now from adding capacity really comes through next year. If we have a snapback, that is a further boost to that outlook. As you know, the growth next year, we don't believe is contingent on a snapback. Okay. Thanks, John. Then, just on the price cost side, you know, you noted that a lot of the pricing actions are from, you know, prior year catch-up, and you don't expect to maybe see some of that gains in the future. Is that accurate or how much price should you potentially hold on to, given that we are moving through a deflationary environment, would you consider that Europe is still, you know, oversold? Again, these are structural price increases that we should, you know, kind of consider, put you at this earnings power level, you know, on a go-forward basis? Yeah. you know, I would say that, you know, we are confident in our, you know, price position. Like you said, just to reiterate, the majority of what you saw in the Q1 pertained to price adjustment formulas or prior period activities. really the incremental inflation, I mean, incremental price increases that we did in the Q1 were all in response to incremental cost inflation. don't forget that this is a world where, you know, we're still seeing inflation, right? It's still 7% or so. And whether it is open market or whether it is price adjustment formulas on a, on a look back basis going into next year, you know, that should benefit us. One thing I would also say is, you know, net price is not a luxury in our business. This doesn't tell the full picture. We also have to cover, you know, higher interest expense, inflation on SG&A, inflation on capital goods. For our position, we really need to manage through the cash cycle and look at inflation through the cash cycle. You know, we shouldn't look at just net price as what's going on competitively dynamic about being able to manage through the cycle. I think it's, like I said, it's not a luxury, it's something that we need to be able to manage the cash cycle. Just one more quick one, if I can. Just on the free cash flow, when do you expect your free cash flow will be closer to that adjusted number of $475, just be providing one kind of guided number? Keep in mind, the adjusted free cash flow is to demonstrate what the underlying cash flow is of the business operationally, and it, and it deducts the cost of maintenance capital. You know, Yeah, I'm sorry. It does not include the impact of expansion capital. Included in that is the netting of the maintenance capital. That'll always be there. I think we'll always have some level of expansion, you know, growth related, IRR related, you know, investments in the business. I don't know if you ever totally close that gap, but the important point is through the strategic projects that we're doing right now, they ultimately lift up the, the total EBITDA. Under, you know, the true free cash flow should actually surpass the level of adjusted free cash flow business eventually, right? That's what we're trying to aspire to, and I don't wanna get caught up in one bucket or another, but we believe that at the end of the day, all of this is creating a virtuous cash cycle for the business. Thanks. Thank you. Our next question comes from Mike Roxland of Truist Securities. Mike, your line is now open. Please go ahead. Thank you. Thank you, Andres, John, and Chris. Congrats on a very good quarter. Yeah. Thanks. Just wanted to get your thoughts on glass fundamentals. I think in the last call you mentioned the fundamentals were the strongest you've seen in 20 years. Obviously, there's a little bit of a break here, whether it's due to stocking, slower consumer, whatnot. You're still guiding to at least on a normalized basis, you know, growing glass demand. Can you walk us through some of the things that you're doing internally, checks and balances, just to make sure the company is not getting ahead of its skis, given, you know, currently favorable industry dynamics? We think the glass fundamentals, that we've been describing remain valid. Obviously, at this point in time, we're seeing these macro dynamics that will create a pause. We might see a little bit of trading down by consumers, that is very typical of a recession. Once the economy rounds back, then the consumers move up the ladder again. What we see is a temporary pause, and then the fundamentals will kick in again because they've been responding to the evolution of the consumer phase, what their preferences are, and they will continue influencing our demand. One thing to add to that, Mike, is, you know, if you take a look at our capital expansion program that we have underway right now, the amount of growth that that enables is still frankly below our market share position of the expected market growth over the next few years under those set of assumptions. As far as concerned about getting ahead of, you know, ourselves on our skis, you know, we're still, you know, our investment still is below, quote-unquote, our market share position of that growth. Also volumes. [crosstalk] Anything you're doing internally, o ops, sorry. Go ahead. Sorry. No, no. Please go ahead, Andres. My apologies. Sorry, Mike. I think we lost you there. We didn't hear you. I'm sorry. No. Okay. I guess the question is, I mean, anything that you're doing internally to stress test your you know, the forecast, you know, your customers' forecast and the like, to make sure that what they're forecasting is actually going to materialize? Some of your peers, as you know, some in different substrates were a little aggressive in their forecast. I'm wondering, just given that there's been some turn in the dynamics here, whether you're doing anything internally to make sure that your forecasts are accurate and appropriately stress tested? I would say that we got a pretty advanced business intelligence capability where we're able to forecast and look at all the different, many, many variables in the business. You know, and that does point to, hey, you know, if we wanted to understand the recessionary impact of our business, you know, and I've said this before in the past, it could be down 3% or so. That seems to be the sensitivity to it. If we take a look at all of those, you know, fundamental-like dynamics, they still point to continued growth of our business in more normalized environments. I would also go back as is what are we doing? One of the things we did do is we secured this growth through long-term agreements, you know? In that sense, you know, I don't think that we're going over our skis or going beyond what the customers are willing to commit to. Got it. Just one quick follow-up. Just in terms of the MEI initiatives, obviously, you're targeting $100 million plus for this year and for the next couple years. I believe the last few years have focused on price and revenue optimization. Could you just expand on other opportunities that you're pursuing, whether it be through like SG&A reduction, lowering cost in your plants, or some of the other things you may be pursuing that will be responsible for getting you to that, you know, $100 million for the next few years? Yeah. Yeah. I would say, the benefits this year are pretty balanced. We got revenue optimization, which is more contract compliance and value-based pricing. Factory performance, which is, you know, looking for productivity, and our cost transformation program is SG&A type of reduction that we've been doing for a few years. What I would say is that if you take a look at this year, you know, we got a really good, as we said on the front end here, very good operating performance of the business. We're looking for good benefits out of that. I mean, we did some restructuring, you know, that, you know, we took out two underperforming furnaces last year that we're getting the benefit on. We got a pretty comprehensive program around things like labor, energy reduction, automation in the logistics and network optimization, and working on PTP and speed improvements. Finally, the most, you know, maybe the most incremental important part is what we're doing in North America right now, and that is. That's very holistic too. As I mentioned before, we got a very good start to our contract renegotiations there, and that was a clear benefit in the Q1, as well as a wide spectrum of operating elements and other factors within that business. Got it. Thanks very much, and good luck in the balance of the year. Thanks. Thank you. Thank you. Our next question comes from Mike Leithead of Barclays. Mike, the line is now open. Please go ahead. Great. Thank you. Good morning, and congrats on a nice start to the year. [crosstalk] Good morning. Thank you. First question, just on European EBIT margins. They were 28% this quarter. I'm assuming inventory reval added a few points there. Just how sustainable do you think underlying margins are in, say, this mid-20% range or so? It sort of double what you historically ran at before last year, but obviously, you're taking cost out as well. Just how sustainable do you think these current margin levels are? Yeah. Well, clearly, let me first take crack at that one. Clearly, the Q1 was very strong. You know, let me just step back and talk about margins overall, where we think this year and where we think that they're gonna go as a company in kind of the major segments. This year, we would expect our overall segment profit margins to be in the mid-teens, which should be pretty much in line with pre-pandemic basis. If you go back to 2017 and 2018, that's exactly where the margins were. In the Americas, it's probably gonna be in the lower teens, you know, Europe, it should crack 20%. If we take a look a little bit further into the future, with some of the things that we've been talking about during this call and the activities we're doing, we think overall segment profit margins in the next year or two should be more like in the mid-to-high teens. That would bring the Americas up from potentially low-to-mid teens, especially with the margin recovery in North America, and then continue something 20% or higher over in Europe. We continue to build from there. Hopefully that gives you some insights on kind of a more normalized view and where we're trying to take the company. Yeah. I would like to highlight that the margin improvement in Europe has been a multi-year dynamic. We started to improve back in 2016, and we've been improving year after year since then. Great. Thank you. Then second, just a little housekeeping. I think you bumped full year EBITDA by about $100 million. Free cash flow moved higher by about $25 million. Is there a working capital offset or John, maybe you can just help parse out any other moving pieces there? Yeah. Indeed, you know, to your point, EBITDA is up more than $100 million and free cash flow up more than $25 million. Obviously there's a difference there. One thing to keep in mind is our free cash flow outlook is a floor. We anticipate to hit that or like, you know, probably do better. That's our intent. You know, to your point, working capital performance will reflect what we think is the shape of the, you know, the sales volume curve and trend. You know, that's gonna play out through accounts receivable and inventory through the balance of the year. We think it's prudent right now to keep a conservative approach on how that plays out and taking the most conservative view on that, which is that, hey, things continue to be softer towards the, you know, over the balance of the year, but then actual demand picks up in the back half of, you know, the back half of the Q4 where you're actually rebuilding receivables, for example, and things like that. You know, ideally, you know, we bounce back sooner than that. I think at this point in time, it is best to take a conservative approach. Probably working capital is probably a $50 million swing factor in our business right now. As we said in the prepared comments, we'll keep you updated, as we see a better sense of what that curve looks like. Great. Thank you so much. Thank you. Thank you. We currently have no further questions. I'll hand back to Chris Manuel for any further remarks. Thanks, Alex. That concludes our earnings call. Please note that our Q2 call is currently scheduled for August second. Remember, make it a memorable moment by choosing safe, sustainable glass. Thank you for your interest. Thank you for joining today's call. You may now disconnect your lines.