Hello and welcome to today's O-I Glass third quarter 2024 earnings conference call. My name is Bailey, and I will be your moderator for today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I'd now like to pass the conference over to our host, Chris Manuel with Investor Relations. Please go ahead. Thank you, Bailey, and welcome everyone to the O-I Glass third quarter 2024 conference call. Our discussion today will be led by our CEO, Gordon Hardie, and our CFO, John Haudrich. Following their prepared remarks, we will host a Q&A session. Presentation materials for today's 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. Now I'd like to turn the call over to Gordon, who will begin on page four. Good morning, everyone, and thank you, Chris. Today we will review our recent performance and the actions we have taken and will continue to take to grow the value of O-I. Last night we reported an adjusted net loss of $0.04 per share for the third quarter of 2024, a decline from last year's strong performance. Our lower earnings primarily reflected curtailment of 18% of our production during the third quarter, as we took decisive action to reduce inflated inventory levels after several quarters of sluggish demand. Net price was also down, partially offset by higher shipment levels. We are rapidly implementing our Fit to Win program to improve performance. In addition to right-sizing inventories and making significant reductions in SG&A costs, we are working to drive productivity and close unprofitable redundant capacity to improve our economic profit. While these actions impact near-term earnings and cash flow, we believe they set the foundation for a solid recovery in 2025 and should enhance our long-term competitive position, which is key to future profitable growth. As we take these self-help actions to improve the company's value, we see that market conditions are slowly recovering. Our sales volumes were up modestly in the third quarter, as shipments increased in nearly all geographies. Further, our Magma program achieved a key milestone as our first greenfield plant began operations in Bowling Green, Kentucky, this past quarter. 2024 has been a challenging year. Our performance has been impacted by destocking in both the trade and in-home, together with sluggish consumption given economic uncertainty. We have therefore adjusted our outlook to reflect a continued softer-than-expected marketplace. While this performance is well below what the business can deliver, we expect significantly better results in 2025, as our Fit-to-Win measures improve our competitive position and markets gradually recover. Let's now move to page five and further discuss the actions we are taking to increase the value of the company. We believe O-I has significant potential and are taking meaningful actions to advance the company. Our focus is on driving near-term returns by enhancing our competitiveness and capital discipline. This approach will position us well to achieve profitable growth when markets turn. We will execute this over three horizons. In horizon one, we will focus on our Fit-to-Win program, which we expect will drive a step-change improvement in profitability, cash flow generation, and the competitive position of the company. We see significant earnings improvement that is within our control by improving the profitability of the volume we have, and not dependent on the level or timing of a market recovery or incremental volume. In horizon two, we intend to accelerate profitable growth by leveraging a much more competitive cost position enabled by our Fit to Win program. As we seek to grow the business, we plan to align our CapEx with strategic customers' long-term plans, particularly in large and developing markets. Finally, in horizon three, we expect to have strategic optionality, which may include geographic expansion into new markets with potentially large profit pools. This plan is different from past efforts. We are conducting a comprehensive review of our entire business and value chain. This holistic approach aims to reshape our company and streamline our operations, optimize our network, and reduce our cost of doing business significantly. In order that we boost our competitiveness and drive profitable growth. While it is early days, we have established initial three-year targets that span both horizon one and horizon two, as captured on the slide. Specifically, by 2027, we expect to generate sustainable Adjusted EBITDA of at least $1.45 billion, free cash flow of at least 5% of sales, and an economic spread that is at least 2% above our cost of capital. We expect our results will improve by $300-$350 million in 2027, which represents around a 30% increase from the 2024 EBITDA levels. Let's now turn to page six. While near-term performance is under pressure given sluggish market conditions, we are rapidly implementing our Fit-to-Win priorities in two phases. In Phase A, we are streamlining the organizational structure. In Phase B, we are reshaping the supply chain to enable profitable growth. From these first steps, we expect to deliver at least $300 million in savings by 2027. We are making rapid progress and anticipate achieving at least $175 million in savings in 2025, which is 60% of our three-year target. Key milestones achieved in the past 90 days include three focus areas: reducing excess inventory, driving productivity, and reshaping SG&A. With regard to reducing inventory, we have cut 18% of our capacity in Q3, reducing IDS by 17% to 59 days, with further improvement in quarter four to come. With regard to driving productivity, we are working to take out all redundant and low profitability capacity. Significantly increasing productivity is the cornerstone of the turnaround of the business. We are evaluating the closure of at least 7% of capacity by mid-2025 to reduce the fixed cost base of the network. The closure of unprofitable and redundant capacity should generate more than $100 million of annualized savings. As part of this evaluation, we have already announced the closure of approximately 4% of capacity, which should benefit 2025 results. With regard to reshaping the organization, we are moving to de-layer the structure, shift accountability to local markets, and reduce central operating costs significantly. These actions should reduce SG&A expense to no more than 5% of sales by early 2026, saving over $200 million on an annualized basis. The first steps are well underway, with more than half of the targeted savings expected in 2025. Overall, initial Fit-to-Win actions should generate over $300 million in savings and underpin delivery of our 2027 EBITDA target. Additionally, in Phase B, we expect to generate additional value through total supply chain optimization by driving productivity across the fleet, closing high-cost operations, and transferring profitable volume into our remaining network. Efforts will also include procurement productivity, operational improvements, and a more disciplined salesforce management. These new ways of working should deliver further savings and higher margins, helping us achieve our 2027 performance targets. We will provide more details on Phase B at our March 2025 Investor Day. Let's now turn to page seven and discuss the commercial environment. As we quickly implement our Fit to Win priorities, we do see some green shoots in most geographies, evidenced by modest sales volume growth during the third quarter. On the left, we have illustrated our volume trends. Following several quarters of lower demand, shipments increased by 2% in the quarter. Volumes in the Americas increased by 7%, with shipments rising across all geographies, including a double-digit increase in Brazil. All categories showed improvement except for spirits, which continue to face challenges, particularly in North America. Shipments in Europe were down by 2%. However, we noted solid growth in Southeast Europe and in the U.K., while shipments were down in Southwest Europe given softer beer and wine demand, including slower export activity. Although market conditions remain uncertain, consumer demand trends seem to be slowly recovering, as illustrated on the right. While all categories have shown improvement over the course of the year, consumption of beer, wine, and spirits in glass containers is still lower, while food and non-alcoholic beverages are up from prior year. Our shipments trends now align with consumption trends, as destocking recedes in most categories except for spirits. Rather than the modest U-shaped recovery we expected earlier in the year, actual trends indicate an L-shaped recovery, given a more gradual improvement in consumer demand. It has been a challenging year for O-I, along with the broader food and beverage marketplace, to accurately forecast consumer trends given complex macro factors. In particular, there is considerable uncertainty and lack of clarity regarding the levels of in-home pantry stock and the rate at which it is depleting. This remains a significant unknown, particularly in the U.S. To address these forecasting challenges, we are working more closely with customers on integrated business planning. We have also made targeted investments to improve our market understanding and predictive analytics capabilities. Over the balance of the year, we remain cautious and expect sales volumes to be about flat in the fourth quarter, with October shipments up 2% from last year on a same-day basis. Let's now turn to page eight. While we have navigated sluggish market conditions since mid-2023, we believe this is largely cyclical and demand will return, but more slowly than originally expected. The two charts on this page show the overall consumption trend by category for products in glass packaging. We have separated the trends between mainstream and premium products. Over time, glass demand is increasingly influenced by key mega trends such as health, wellness, sustainability, and premiumization. As you can see, the trend over the past 25 years is clear. Premium products tend to grow faster than most mainstream categories, even if at times they are temporarily impacted by macroeconomic cycles or events. Further, the growth of premium products is expected to continue, supported by customer strategies and investments. As a result, we are confident that demand across mainstream categories will stabilize, while stronger growth will reemerge across the premium categories in time. We are changing our operational and commercial focus to properly capitalize on this growth. Now I'll turn you over to John, who will review financial matters. Thank you, Gordon, and good morning, everyone. Let's begin with our recent financial performance on page nine. O-I reported an adjusted loss of $0.04 per share in the third quarter, a significant decline from historically high adjusted earnings of $0.80 per share last year. This decrease was primarily due to higher operating costs, as we curtailed 18% of our capacity to rebalance inventory levels in response to sluggish demand over the past several quarters. Downtime impacted year-over-year results by about $0.65 per share, partially offset by strong operating and cost performance. Net price was also down, partially offset by 2% sales volume growth. While sales volume was softer than anticipated, net price was consistent with our expectations heading into the quarter and reflected price adjustments established at the beginning of the year, as well as cost inflation, mostly in Latin America. The third quarter should be the lowest net price realization in 2024 and be less of a headwind in the fourth quarter. Non-operating items were a net headwind, with higher interest expense and an elevated tax rate more than offsetting the benefits of lower corporate retained costs. Heading into the quarter, we expected flat to slightly positive earnings in the third quarter. Our operating performance was in line with these expectations, as favorable cost performance mostly offset the impact of lower sales volume. Non-operating costs were about $0.05 higher than expected, primarily due to higher tax rates. Turning to page ten, let's discuss the performance across our two segments. The Americas posted a segment operating profit of $88 million, down from $116 million last year. Net price negatively impacted results, mostly due to the cost inflation across Latin America, while sales volume increased by 7%, as Gordon discussed. Additionally, we temporarily curtailed 15% of our capacity to reduce elevated inventory levels, which was up from prior year, resulting in higher operating costs. In Europe, segment operating profit totaled $56 million, a significant decrease from $185 million last year. As expected, net price was a major headwind due to price adjustments earlier this year, and sales volume declined slightly. Operating costs were high, as we temporarily curtailed 21% of our capacity to rapidly reduce inventory levels that had built up over the past several quarters, which was up significantly from prior year downtime levels. Let's discuss our business outlook on page 11. We continue to recalibrate our full year 2024 guidance due to softer than anticipated demand. Our prior guidance assumed sales volumes would be up mid-single digits in the second half of the year. Actual third quarter volume was up 2%, and we now expect fourth quarter sales volume will be about flat with prior year levels. As such, we have revised our annual sales volume outlook lower by 2%-3%. As shown on the left, we now expect full year adjusted earnings to approximate $0.70-$0.80 per share, down from our prior guidance of $1-$1.25 per share. Lower full year sales and production volume impacted our annual guidance by about $0.30 per share, which should be partially offset by about $0.05 of additional cost management actions. Lower earnings also drive a higher annual effective tax rate due to minimum tax withholdings and interest deductibility limitations in certain jurisdictions. We have also adjusted our free cash flow guidance, which we now expect will be a use of cash between $130 million and $170 million. This sizable adjustment includes lower earnings due to softer shipments and additional cash payments related to incremental plant and SG&A restructuring as part of our Fit-to-Win actions. However, the most significant change is due to higher working capital levels, with year-end IDS expected to be in the low 50s compared to our previous target of mid-40s due to softer than anticipated demand in the second half. IDS in the low 50s is still favorable compared to historic standards. Over time, we aim to further reduce IDS to enhance cash flow as we improve our end-to-end supply chain. As Gordon noted, we do not believe our 2024 performance is reflective of what the business can deliver. In particular, current year earnings and cash flow have been significantly impacted by temporary production curtailments and restructuring charges, among other factors, as detailed at the bottom of the chart. As such, O-I's underlying earnings power is stronger than current year results illustrate. Let's turn to page 12. 2024 has been a challenging year. However, we are taking proactive steps, which we believe will set the stage for stronger performance in 2025. As illustrated in the chart, we are providing an early view of the key business drivers that we anticipate will support improved results next year. We expect fit-to-win initiatives will boost adjusted earnings in 2025 by at least $175 million, and results should benefit from some level of production normalization after significant inventory adjustments. Yet we maintain a cautious outlook on commercial conditions until markets fully stabilize. We anticipate better free cash flow supported by higher earnings and lower capital expenditures as we adopt an economic profit approach to capital allocation. Finally, we expect lower financial leverage as earnings and cash flows rebound. The chart includes more details for your review. Now I'll turn it back to Gordon on page 13. To conclude, we are taking rapid, decisive action to position the company for a solid recovery in 2025 and beyond. Our Fit-to-Win initiative is central to our strategy to improve our competitive position and enable future profitable growth. We are optimistic about the future and are determined to improve the value of O-I. Thank you, and we are now ready to take your questions. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, please press star followed by one. Please limit yourself to one question and one follow-up before returning to the queue if you have any additional questions. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question, and please do ensure that you are unmuted locally. Our first question today comes from the line of Ghansham Panjabi from Baird. Please go ahead. Your line is now open. Thank you, Bailey. Good morning, everybody. I guess first off, on the working capital being a much bigger negative than you initially projected, I think you said roughly $100 million more. Is it likely that you'll still have too much inventory as we sort of cycle into 2025? I think you just said that volumes are tracking a little bit lower than you forecast for the back half of the year. And I'm also trying to reconcile why you're expecting Q4 volumes to be flat when October was up a little bit. Yeah, Ghansham, I can talk about the working capital. Yeah, as I mentioned in the prepared comments, we were targeting kind of mid-year that we would get our IDS down to the mid-40s, which is at a historically low level for the business. Based upon what we're seeing with sales volumes being a bit softer and the fact that it's challenging to move our network that quickly, we are probably going to be in the low 50s. So a little bit of a delta there, and that's resulting in higher inventory at the end of the year, higher working capital, as you referenced. As we stand here right now, there's about $125 million that we're incurring in expense as we draw down inventories this year, meaning extra expense that we're taking because production is lower than the sales activity. We think that at least half of that or more will come back next year as the worst of the inventory destocking activity, internal destocking is done, but we will continue in all likelihood to do some drawdown of inventory. So the remaining component of that $125 million will be in a future period. Okay, got it. And then as it relates to pricing in Europe for 2025, what is the base case at this point? I'm just asking because obviously you're doing a lot in terms of cost cuts and so on and so forth. If you look at European margins for 2024, just assuming just sort of your estimates for the fourth quarter, implied estimates for the fourth quarter, margins are basically back to pre-COVID levels. Are you assuming that you're going to get cost savings next year and that offsets incremental pricing on the downside, or should we expect margins to build up of 2024 specific to Europe? I can take the last question first and then turn it over to Gordon on the volume and other questions. Certainly, our margins right now are at a suppressed level. Even as we mentioned before, we're at about 18% curtailment level in the third quarter. We'll probably be in that 16%-17% still in the fourth quarter. Okay, so we're going to be incurring an earnings penalty that's pretty consistent with what we saw here in the third quarter. That, in effect, is suppressing the margins. We do believe that a more normalized segment profit margin of the mid-teens is probably a good next step for the business to tear up to. It'll obviously be a little bit higher in Europe and a little bit lower in the Americas given the mix of business. Yeah. All right, Ghansham. When we look at volume, I think we're sort of calling flat, and it's almost a view of the two hemispheres. So if you look in the Americas, I would say we were looking at flat to increases driven. And then in Europe, I would say it would be flat to slightly down on volume driven by the wine situation. And also, as big export markets like China and the U.S. are suffering some softness, you could see spirits volumes maybe coming off a bit there. With regard to pricing, again, I think we're looking at a sort of flat situation, mainly probably in Europe, a bit of price pressure as there is probably more capacity there in the market. Less so in less pricing pressure, I would imagine, in the Americas given particularly in places like Brazil where the capacity is fairly full across the region. We've got tighter capacity in North America, a bit more kind of free capacity in Europe, which may put pressure on some pricing. So we're looking as we look forward on flat. And then as we've laid out, we are taking very rapid action around the cost base of the business. And the net of all that is we see an improved outcome for the business going forward. Perfect. Thank you so much. Thank you. The next question today comes from the line of George Staphos from Bank of America. Please go ahead. Your line is now open. Yeah. Hi, good morning. This is actually Ghansham on for George this morning. So I guess with the capacity closures that you've done so far and those that you're considering for next year, I guess where do you think you will be running in terms of utilization rate by the end of next year? And then what could be the potential benefit from better operating leverage as a result of that? Yeah, Ghansham, thanks. We included it in the slide. So right now, at least across the year in 2024, we're looking at about 13% capacity curtailment, temporary capacity curtailment to deal with one, the softer sales volume, but also bringing down the inventories. Okay? And so if you take a look at that, more than half of that will be dealt with through permanent capacity closures, and that will give us $80 million next year, $100 million on a run rate basis. The remaining balance is due to continued temporary curtailment, of which that remaining balance, about half of it or more, probably comes back to the business next year because we exit the worst of the destocking while we still continue to anticipate some level of destocking. But that also gives us flexibility in the marketplace depending on how volumes trend and allows us to take advantage if there's a little bit better recovery. So, 75% of it is going to be dealt with between capacity closures and some level of inventory management normalization. Got it. Appreciate that. And then, I guess, in terms of the initial 2027 targets you put out in terms of EBITDA, I guess what sort of volume growth are you underwriting for that? And I guess what is the potential long-term volume growth of the business moving forward? And what gives you confidence in that moving forward? I'll address the first part of that. Our assumptions right now are volume neutral. Okay? Right now, when we take a look at bridging from where we are today to where we think is the 1.45, that does not volume contingent at all. It assumes volume neutrality. Yeah. With regard to how the markets are going to evolve from a volume perspective, over the medium term and through the cycle, as we've seen in the charts there, we see mainstream glass stabilizing while premium glass will continue to grow consistently. We see many of our major customers driving this portfolio approach and investing behind it. If we look at our own portfolio, it's split really between 80% commodity to mid-premium and 20% premium. To play in that midstream more effectively, we need to get our cost base down. We need to be more competitive. Not just against glass. We need to close the gap to cans as well. As I said on our previous outing, the current gap between glass and cans is about 35%. That's just too high. You will lose share. We're losing share to cans. And all the data we have suggests if we can get that cost premium between 15% and 17%, then you see a reverse flow from cans to glass. So that's the reality. And we need to face up to that, and we need to get into it. And that's exactly what we're doing in terms of driving the competitiveness of the business across both the organizational structure and particularly across the total supply chain. And so as you get that cost base down, be more competitive, not just against other glass competitors, but against cans, that then underpins a cost base that also allows you to leverage into premium and still take advantage of that continued and consistent premium growth as we go forward. And so that's our approach. I think all the data supports that, the customer strategies, the customer investments behind premium, and then the opportunities we see to really get after a much lower cost base in the business underpins that approach. That we feel will give us a better portfolio mix, a richer portfolio mix with higher margins and better ROIC as we go forward. Okay. Thank you. The next question today comes from the line of Arun Viswanathan from RBC Capital Markets. Please go ahead. Your line is now open. Sorry about that. Please. So So thanks for taking my question. I guess first question would be, when you think about some of your bridge items, it looks like for EBITDA, would it be possible to potentially add in the 175 Fit to Win benefits for 25 on top of, say, the lower end of your guidance, maybe 1.1? And so a starting point could be kind of in that 1.25-1.75 range. What are some of the headwinds to that kind of math when you think about 2025? Thanks. Yeah, Arun. Yeah. I think you're thinking about it right. I mean, we got a base this year with that we shared. The 175 is meant to be additive to it as well as some value, as I mentioned earlier, the normalization of production because we're exiting the worst of the inventory destocking. On page 12 of the materials, we have some of the puts and takes. You'll still do better in some of the interest start to come down a little bit. You see normalization of tax rate as earnings get better. Of course, we have the commercial elements that we identified there, either neutral to some slight headwind in sales volume and then the negative net price that we flagged there. We don't believe it'll repeat in 2024, but there might be some pressure there, so hopefully, that gives you some of the moving parts. And certainly, while we're not looking to quantify all these levers today because it's too early, we certainly will fill in the blanks at the next year's earnings call. Okay. Thanks for that, John, and similarly, on the free cash flow bridge, so you went from a source of $75 million at the midpoint down to a use of $150 million, so kind of a $225 million swing there. So when you think about a free cash flow going forward, should you be free cash flow positive in 2025, or does this kind of slower inventory depletion push that out a year or two into 2026 or 2027? How are you thinking about that as well? Thanks. Got it. Just to be clear again, on page 12, we are indicating that we expect to be in a better free cash flow, cash flow positive next year, earnings improving as we just kind of had talked about, a lower CapEx level as we come off of some of the peak strategic spending that we've done over the last few years and take a more economic profit approach to how we look at some even the maintenance spending in the business. And this whole working capital will normalize. Obviously, it's been a challenge with the level of production downtime and how that affects accounts payable, for example, even if we're making progress on the inventory level, so as production normalizes next year a little bit, you'll get an AP boost, and you'll also have some inventory continue to come out of the system even if we're carrying a level of temporary downtime. And sorry, one more if I could. On just CapEx, are you still pursuing what kind of Magma spending do you have in that CapEx number? Is there a way to potentially bring that CapEx down even further, or does that encapsulate both Magma and any capital projects you have? Thanks. As we look at Magma, I mean, obviously, we've just started, as Gordon mentioned, just started production at the new Bowling Green facility. It's an important stage gate for us. I don't anticipate a lot or any Magma spending on CapEx next year until we get through that stage gate and understand next steps with that new technology. So yeah, so yes, as we're signaling there, CapEx will come down. It'll probably be below the $500 million level. Thank you. The next question today comes from the line of Gabe Hajde from Wells Fargo. Please go ahead. Your line is now open. Hi, good morning, guys. This is actually Richard Carlson for Gabe. Hey, Richard. Hey, Richard. Richard. It's a very useful slide. Hey, good morning. It's a very useful slide on slide 12. So I just want to ask a couple of questions there. So first, on sales volume, it sounds like you talk about seeing some green shoots and maybe seeing some more signs of being positive, but you're cautious going into next year. So just want to get some of the puts and takes. What areas are you actually feeling more cautious about, and what areas are you starting to get confident, and what could the shape of that look like for next year? And then my second question is going to be on net price because also, I guess it looks like you're cautious going into the year. But at this point, what is your visibility into pricing for 2025, and what percentage of your contracts are already signed, and what could move that number a little bit as we get into the year? Thank you. Yeah. With regard to sales volume, as I said earlier, as we look at the Americas, we look at the amount, particularly in Latin America, strong. And also in North America, we see the trend probably flat to slightly up. With regard to Europe, obviously, spirits is a potential issue as you see softening markets in China, which is a big offtake market for European spirits brands, and also wine. And so as we look at those categories, we're cautious on the outlook in Europe. There is also some spirits pressure, obviously, in North America. So spirits, I think, and wine, as they have been year to date, will continue to be something we keep a watchful eye on. And that really is guiding our thinking around sales volume. With regard to net price, again, as I said, capacities are pretty tight in Latin America and in North America. In Europe, with the softening volumes, a bit more capacity available in the market, our assumption is that there would be some sort of pricing pressure there. They are the two main sort of drivers guiding our thinking on how we're looking about 2025. Maybe just to add on to that, you had asked about kind of how our contracts are positioned. About 55% of our business globally is under long-term agreements. That's about a third when you take a look over in Europe and the rest of our open market, and it's about 70% when you take a look at the Americas. Those are all fairly stable. They all have price adjustment formulas, albeit there hasn't been a lot of inflation this year. We're looking stable to a little bit of improvement there. You talk about the timing and the visibility is the biggest open market negotiations we have are over in Europe, two-thirds of our business over there. That usually commences in the November timeframe. So it's still early, and we'll keep you up to date as we understand the layout there. Great. Thank you. The next question today comes from the line of Josh Spector from UBS. Please go ahead. Your line is now open. Yeah. Hi, good morning. I want to kind of follow up on the net price, but maybe think a little bit more medium to longer term. So I guess as you look at your Fit-to-Win and your longer-term goals of generating $300 million higher EBITDA from savings, how does net pricing play into that? Understanding that there's some hedges that roll off in Europe. And when you talk about glass price competitiveness, how does all this square together? Prices coming down to become more competitive and you guys growing EBITDA at the same time and your cost going up. So any thoughts there would be helpful. Yeah. As I said, we have a fairly focused program both on reshaping the organization structure and the cost of doing business, and then how we operate across the value chain. And as we pointed out in the past, this is an end-to-end review of our value chain with a focus on squeezing out the waste and inefficiencies that are there. And then using that to increase earnings, increase cash flow, and be more competitive where we need to be on price in the market. And that then gives us that flexibility. And that will depend on a number of different dynamics in the market at any given time. But our main focus, as we say, over the next three-year period will be to really drive productivity and reshape the cost structure of the business that gets us into a much more competitive position. There is growth in the market. We just haven't been able to access some of that growth because our cost base was too high. We're facing that reality, and we're taking all and every measure that we need to make sure we're in a competitive position to take advantage of that growth. If we look at our top 20, 25 customers around the world, all of them have growth plans. All of them. And so we need to position ourselves and be competitive that we can ride with our large customers as they develop their businesses and be the supplier of choice. Josh, I would add that if you go back to what Gordon was talking about during the prepared remarks, with Fit-to-Win, we have Phase A there, which is looking at $300 million of savings. That in and of itself, all else being equal, would bridge where we are right now to the range that we're talking about in 2027. But we also did indicate there's Phase B, which has more savings and opportunity associated with it. And if we do run into some headwinds, net price or energy, etc., we're targeting more savings. So we feel confident about the ability to achieve our target. Thanks. And that's helpful. I guess if I could just follow up on SG&A. I mean, it's a pretty big target in terms of what you're hoping to save overall. I mean, it looks like maybe a 20% reduction. I guess if you look at benchmarking yourself versus peers, does that put you closer to peers? Would you be best in class? Or I guess, how do you determine that that's the right level that you should be operating with? Yeah. As we mentioned in July, our SG&A to revenue was running at about 8%. Many of our competitors are at five or below. So that obviously is an immediate benchmark. And that's one lens we took on it. The other lens we've taken it is looking at the portfolio. We have an 80% commodity to mid-premium portfolio. Therefore, we need a cost base that reflects that reality and reflects that world. And so we looked at all of the activity, and we asked ourselves, how does that support that, or how does it subtract from it? And through that lens, we have made the adjustments that we feel are necessary to right-size the cost base to support the strategy we have going forward. Really, there's anything we can't connect to a health and safety result, anything we can't connect to a customer and innovation result, and anything we can't connect to a better cost outcome and capability outcome is going to get challenged on whether it needs to exist in our business or not. Very clear framework and a very clear set of benchmarks that have guided the decisions. We're very comfortable with the decisions we've made, and we're very comfortable with the speed at which we're taking action to reduce that cost base. One thing I would add there, we've taken action already that accounts for about $120 million of the $200 million target on a run rate basis. That's 60% of the target. Calendar-wise, we expect to get $100 million out of that next year because of the phase-in and things like that. But so we're already more than halfway actioned on the elements that drive that reduction. More work will be done over the course of 2025 as we look to have an exit run rate from 2025 of the full $200 million that will fully go into 2026. Got it. Thank you. Our next question today comes from the line of Anthony Pettinari from Citi. Please go ahead. Your line is now open. Hi, good morning. Hi, Gordon. Hey, I was wondering if you could talk about maybe at a high level the improvement in forecasting that you're looking to drive, what enables that, and what gives you confidence you can kind of improve forecasting. Yeah. So obviously, the whole COVID period saw a huge disruption in normal patterns of purchasing consumer behavior. And as you saw the sales lift through 2021 and 2022, nobody wanted to miss sales. So there were big sell-ins through the chain. I think once you come out the other side of that and customers and down through the chain distribution partners take a look at their inventories and saw that they were very high, then you have the destocking period. And we're really kind of coming to the end of that sort of cycle. I think the big unknown is what is still in the pantries, and particularly around spirits. If you bring beer, wine, and spirits home, beer is consumed faster than wine is consumed faster than spirits. Yeah. And I think what has become clear is how do you get line of sight all the way through to what's happening in the consumer sort of pantry? And I think it's just sharpened everybody's focus on how do you get visibility through what are very long distribution chains. I mean, if you take a look in the U.S., there are three levels to the chain before you get to the consumer. You take a look at travel retail, it's a massively long chain that typically has been kind of hard to get visibility on where all the stock is in different parts of the world. So we've had those discussions with many of our major customers. We all recognize there's a way for us to share information, share data, share insights in a much more effective way. And we've agreed to do that with many customers. And also, we're investing in upskilling our own people and also investing in some AI capability around forecasting, which when coupled with the insights our own people bring, actually is giving us a much better result. Yeah. So I think it's sharpened everybody's focus around it. And yeah, I see improvements going forward for sure. And we're starting to see it in our own business. Our forecasts are getting tighter, not where we want them to be yet, but we're getting there. And certainly, when you and I've been out with many, many customers over the last 100 days, it's a real focus for everybody. Got it. Got it. That's very helpful. And then just one quick follow-up. You talked about evaluating closure of, I think, 7% plus of capacity by middle of next year. I guess at first glance, seven plus looks like seven or eight or maybe nine. I mean, is there a possibility that you could have to close or a meaningfully larger percentage, 10%-15%? Just trying to frame that 7% or more and then just kind of the contingency planning around that. Yeah. Yeah. So Anthony, I'll touch base on that. So keep in mind, we're looking at Phase A and Phase B. Phase A, the 7% plus, that's primarily looking at how we align supply with demand and deal with the overhang that we've been talking about. That's going to be partly closures and partly rebalancing against the inventory. But with that, we're taking the opportunity as we look at economic profit to find those handful of furnaces and plants in the network that are low on their economic profit, negative on their economic profit, and try to align both of those together to be able to take out low profitability capacity with shoring up the supply and demand. But that's just Phase A. And that's really when we're talking about this kind of 7% plus. But Phase B is more to what Gordon was talking about, where if we can find more productivity and unlock trapped capacity within our network, we can then shift our books of business into the best higher-performing plants. And that'll either allow us to grow or, more likely, just take out that remaining lower profit redundant capacity. So there's two missions here. I think there will probably be more as we get into Phase B, but that's not necessarily the same mission as we're doing in Phase A. Just a bit on that. Yeah. We mentioned in July that we had run some pilots on reasonably fit plants, and we've seen the opportunity to improve efficiency by anywhere between 10% and 15%. We're getting after that. So as we go through each plant and we find ways to make it more efficient, then that gives us kind of optionality on whether we are then more competitive to go after growth volume, or if the volume is there, but it's not economically profitable, then we would take that capacity down. The fitter we get, the more optionality we have to play as we go forward. But certainly, any place we can't get a return, we will not be warehousing capacity. Got it. Got it. Thank you. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. Our next question today comes from the line of Michael Roxland from Truist Securities. Please go ahead. Your line is now open. Yeah. Hi, guys. This is actually Nicco Pacini on for Mike Roxland. I guess just starting out back to the margin discussion, I think you mentioned mid-teens in total of the total company with obviously higher in Europe, lower in America just as a normalized next step. I'm just, I guess, curious, is that next step like 2025 or after 2027? And the reason I ask is one of your closest European peers posted at a 24% EBITDA margin. You were lower than that. I just was wondering why there's such a big delta and if that can be overcome through Fit to Win. Yeah. Yeah. For one thing, when I was referring to the percentages, I was referring to segment profit. EBITDA is probably closer to high teens-20% as far as where we should achieve. I would say that is a medium-term target, whether that's achieved next year or not. We really will look at that when we get into the numbers at the end of the year. Looking at what we could achieve by 2027, I think it would point to the higher end of that range and kind of more of a return to where we were at last year, which is some of the highest levels of margins that we've seen in a number of years. And I think Gordon already hit on a couple of the differentials of a couple hundred basis points is just in SG&A alone. So not to mention a number of the competitiveness opportunities that we referred to throughout the discussion. So it's really a combination of both of those to try to move from where we are right now into a number and margins that are very competitive for the industry. And within the business from this plan, we've got very clear lines of sight on the productivity measures, where they are, how we get at them, and what they yield. And there's a very disciplined program behind that to deliver on the numbers we set out from here between now and 2027. Got it. Understood. I guess just in switching gears to curtailments and closures, does retrofitting Magma end of life for some of these furnaces either now or in the future? Does that come into play when deciding, I guess, where your closures are? It can. It can give us flexibility. Our focus on Magma at the moment is, as we've mentioned, we've just gone live in Bowling Green, Kentucky and making sure that we deliver on the ability to deliver industrial scale. There's two hypotheses when you bring a new technology to market. One, does it work at industrial scale? And two, can you make the right return on it? So that's the real focus for Magma at the moment and both the technical engineering and commercial teams. Even in the first few weeks, we're learning a lot. As that plays through and we run that plant at industrial scale, there'll be learnings for where best we can then leverage Magma going forward. So yes, it will be part of our arsenal as we look at how we configure the chain to best fit to the market to ensure we get the best returns. That's how we're thinking about it. Okay. Thank you very much. I appreciate it. Thank you. There are no additional questions waiting at this time. I'd like to pass it back to the management team for any closing remarks. Thanks, Bailey. Please note that this ends our traditional quarter call. Just two housekeeping items. First, please note that our year-end fourth quarter call is scheduled for February 5th, 2025. Then second, please mark your calendar for our Investor Day. That's planned for March 14th at The Exchange in New York City. Remember, make it a safe, memorable moment by choosing glass. Thank you. Thank you. This concludes today's call. Thank you all for your participation. You may now disconnect your lines.