Thank you, Jessie. Good morning, everyone, and welcome to O-I Glass third quarter 2026 Conference Call. Joining me today are Gordon J. Hardie, our CEO, and John A. Haudrich, our CFO. Following prepared remarks, we will open the line for questions. Our earnings release and presentation are available on the company's website. Please review the safe harbor comments and disclosures regarding use of our non GAAP financial measures included in those Today's remarks include forward looking statements. And actual results may differ materially from current expectations. With that, I will turn the call over to Gordon.

We will start on slide 3. Thank you, Christopher. Good morning, everyone. Today, we will review our third quarter results update our 2026 outlook and share an initial view of the key business drivers for 2027. Before I begin, I want to thank all our OI colleagues for their focus and commitment. Our teams acted with urgency to navigate a difficult environment particularly in Europe, while continuing to serve customers across challenging markets.

Our third quarter results reflected 3 key trends. Net sales were stable and year over year shipments continued to improve. Adjusted EBITDA declined from last year, Results were stable in the Americas, but significantly lower in Europe. Where higher than anticipated energy and freight costs drove performance below our expectations entering the quarter. Adjusted EPS was down, reflecting lower operating margins and an unusually high tax rate.

Europe remains our largest opportunity to improve financial performance. But progress has been slower than expected. These results are unacceptable, and we are acting with urgency to address the issues weighing on earnings. As I will discuss shortly, we have sharpened our focus on our 4 priorities to restore European margins to competitive levels. In the Americas, our team delivered another solid quarter, the impact of disciplined execution, Fit-to-Win, and close collaboration with customers.

This performance also reflects the broader impact of Fit-to-Win which continues to strengthen our cost base and has delivered a $135 million of year to date benefits. At the same time, energy, freight, and demand headwinds require us to update our 2026 guidance. While these pressures weigh on the near term outlook, demand trends are gradually improving and actions underway should position us for improved adjusted earnings cash flow, and profitability in 2027.

Against this backdrop, our priorities are clear. Execute the Europe recovery plan, sustain momentum in the Americas, and captured the remaining Fit-to-Win opportunity to strengthen performance grow the value of OI. Let's now turn to slide 4 and discuss the top line. As noted, net sales were relatively stable at approximately $1.6 billion as favorable currency translation largely offset modest declines in selling prices and volume.

While demand remains sluggish and uneven across markets and categories, year over year shipment comparisons continue to improve sequentially as shown on the chart. Third quarter volumes declined approximately 2% from the prior year. In the Americas, shipments were down approximately 1% reflecting the earthquake in the Andean region and the onset of the US-Canada trade dispute. Overall, solid growth in Latin America largely offset lower demand in North America.

In Europe, shipments declined just under 4%, Demand increased in the UK and remained stable in Northern Europe, while Southern Europe remained under pressure, particularly in wine related markets. For the fourth quarter, we expect enterprise shipments to range from flat to up low single digits supported by new business wins and easier prior year comparisons. For the full year, we expect sales volume to decline 3% to 4% from 2025.

Looking ahead, we expect gradual sequential improvement to continue supported by new business wins representing approximately 4% of annual sales volume. Now let's turn to Slide 5. Fit-to-Win remains central to our strategy and continues to strengthen our competitive position as demonstrated by our new business wins. This program delivered approximately $50 million of benefits in the third quarter bringing the year to date total to $135 million and cumulative benefits of $460 million since inception.

The actions previously identified under phase a are substantially complete. We also recently initiated a process with employee representatives regarding the proposed permanent closure of an additional European plant. Going forward, our focus is shifting to phase b execution including total organization effectiveness, procurement, energy, and supply chain optimization. The Americas demonstrate how Fit-to-Win can strengthen competitiveness and resilience when paired with consistent execution even in a challenging macro environment.

Europe is earlier in that progression. We intend to build on our nascent gains in plant efficiency, and establish a stronger foundation for future benefits. We now expect $180 million of net benefits this year reflecting the time required to address supply chain challenges in Europe. The deferred benefits will shift into next year, and we continue to target at least $650 million of cumulative Fit-to-Win benefits by the end of 2027.

The remaining opportunity is substantial particularly in Europe, where successful execution of the recovery plan should strengthen operating stability and contribute to higher adjusted earnings and free cash flow. I will return to this shortly. With that, I will turn the call over to John on slide 6.

Thanks, Gordon, and good morning, everyone. Net sales were generally stable. But adjusted results declined from $0.48 per share of profit in the prior year to a loss of $0.09 per share. Lower net price was the primary headwind. Average selling prices declined just under 1% overall as improvement in the Americas was more than offset by declines in Europe. Cost inflation also remained elevated particularly for energy in Europe, reflecting the onetime reset discussed previously and additional inflation related to the Middle East conflict.

The impact of slightly lower sales volume was offset by favorable operating costs as Fit-to-Win benefits more than offset higher delivery and maintenance costs, lower joint venture performance and other 1-time items. As in the prior quarter, adjusted earnings also reflected an unusually high tax rate primarily due to lower earnings in Europe. Turning to the balance sheet. Net leverage increased modestly due to lower earnings.

We continue to maintain ample headroom under our senior secured leverage covenant and liquidity remains strong at $1.5 billion Let's turn to slide 7 and review segment performance. As shown on the left, Enterprise adjusted EBITDA and segment profit declined year over year. Performance continued to differ sharply by segment, with solid results in the Americas and continued pressure in Europe. In the Americas, net sales increased more than 3% from the prior year period, to $970 million.

A volume decline of approximately 1% was more than offset by a selling price increase of just over 1.5% and favorable currency translation. Segment operating profit declined approximately 2% to $137 million Favorable operating costs and currency translation largely offset slightly lower volume and net price. The year over year comparison did include a $6 million 1-time insurance recovery in the prior year, that did not repeat.

In Europe, net sales were $634 million, down approximately 8% from the prior year period. Selling prices and sales volume each declined nearly 4% and currency translation was also unfavorable. Europe's earnings remained under significant pressure. Segment operating profit was $2 million compared to $95 million in the prior year period. Unfavorable net price was the largest driver, reflecting competitive pricing pressure.

Elevated energy and freight costs were approximately $15 million above our expectations for the quarter. Lower volume was also a modest headwind, while operating costs benefited from greater plant efficiency following post restructuring disruption in the first half. Now let's turn to Page 8. We are updating our 2026 outlook and providing an initial view of the key levers and business drivers for 2027. As shown on the left, we now expect 2026 adjusted EBITDA of $925 million to $950 million and free cash flow usage of approximately $300 million.

We expect year end leverage ratio will range from 4.5 to 5x. The revised earnings outlook reflects lower sales volume, including the estimated impact of the US-Canada trade dispute, higher energy and freight costs, and lower Fit-to-Win benefits, primarily due to the slower pace of Europe's recovery. Importantly, we have secured coverage for 100% of our fourth quarter European natural gas needs, Barring extreme price spikes or supply disruption, this coverage should significantly limit further changes in direct gas costs for the remainder of the year.

In addition to lower operating income, free cash flow will be affected by higher inventories resulting from softer sales and cash used to strengthen our 2027 energy risk management position. We expect 2026 results in the Americas will be nearly 50% above 2024 levels driven by record performance in Latin America. However, earnings in Europe will likely remain under pressure through the first quarter of 2027 due to peak energy inflation and normal seasonality.

We believe this outlook appropriately reflects current operating conditions and our expectations for the remainder of the year. Turning to the right side of the slide, our initial view of 2027 calls for higher net sales, and adjusted EBITDA, significantly improved free cash flow, and lower net leverage. Although it is still early, we expect net price to improve through commercial actions including commercial PAS and procurement initiatives.

We have covered more than 90% of our forecasted European natural gas needs for 2027, including 100% for the first quarter. Barring extreme market conditions or supply disruptions, this coverage should significantly reduce our exposure to gas price volatility. Although coverage will increase costs compared to 2026, our average prices remain well below the current TTF forward curve and we retain flexibility to benefit if market prices decline.

We expect stable sales volume with new business wins offsetting sluggish demand will likely remain subdued until affordability pressures ease. Operating costs should improve supported by at least $170 million of Fit-to-Win benefits. This would enable us to meet or exceed our 3 year target of $650 million. The chart provides additional details. These are our current planning assumptions. We intend to provide 2027 guidance at our next earnings call. Now I will turn it back to Gordon on slide 9.

Thanks, John. Europe remains our key focus and largest opportunity for value creation. The segment has significantly underperformed our expectations this year, Commercial pressures and elevated energy and freight costs created a difficult backdrop. While internal supply chain challenges amplified the impact. Our recovery plan focuses on 4 priorities within our control, strengthen commercial performance to improve net price, improve energy procurement risk management, and usage, drive profitable volume growth by strengthening competitiveness, and deliver greater end to end supply chain productivity and performance.

We advanced each priority during the third quarter. As noted earlier, we expanded our 2027 European energy coverage at rates favorable to current market prices and new business wins representing 4% of annual sales volume. We also improved plant pack-to-pull by 1% and identified significant additional opportunities to strengthen logistics performance. Our focus now is to translate this progress into stronger, financial results.

We expect these actions to deliver meaningful improvement and ultimately restore margins. We will continue to track and report our progress with more detail to come when we provide our 2027 guidance on our next earnings call. Let's now move to slide 10. Before we close, I want to connect the near term actions discussed today with our broader value creation opportunity. Our first priority is to improve materially business performance by executing Europe's recovery plan, and capturing the remaining Fit-to-Win opportunity.

Beyond that, we continue to pursue profitable growth opportunities that strengthen capacity utilization and earnings power across the portfolio. Finally, we are evaluating opportunities to create long term shareholder value by optimizing our portfolio, strengthening our position in the value chain, and expanding our strategic flexibility. Our near term focus remains firmly on execution while we continue to advance initiatives that create value over the longer term.

With that perspective, let's now turn to slide 11 for concluding remarks. The Americas delivered another solid quarter demonstrating the power of discipline Fit-to-Win execution. Our immediate priorities are to execute Europe and the recovery plan, sustain momentum in the Americas, and captured the remaining Fit-to-Win opportunity. Demand trends are gradually improving and we expect shipments to be stable to modestly higher in the fourth quarter.

While our revised 2026 outlook reflects incremental pressure, we expect stronger earnings and cash flow in 2027. Thank you for your time, we will now take your questions.

Sure. Let me take that, Joshua. So, as I outlined in previous earnings calls, we have reconfigured or reorganized how we are going to market in each market in Europe. So, how we structure the sales force behind the different categories, different groups of customers, and also how that Salesforce is managed on a daily, weekly, monthly basis. And we are we are starting to see that come through in terms of forward visibility where the leakages on performance or price, for example, So we.

We are we have made a lot of progress in this quarter tightening up and executing the system that we had envisaged. there is no doubt, but there is opportunity for us to, execute commercially more effectively. To negotiate or in a way that can capture the cost in a more timely fashion. We have a number of contracts that are annualized, which means you do not pick them up until the following year, that is something we are looking at addressing given the excessive cost and inflation environment that is out there.

We have also brought in some new talent and we have structured the teams in a way that there is much more focus on, you know, commercial improvement. And we see that coming through in a number of wins both in Europe and also in the Americas. And those wins are now totaling up to 4% of our annual volume. If I give you some detail, for example, where we are most ahead in Europe, for example, in our northern region. You know, our beer sales were up almost 4.5% in the quarter, while the beer category we estimate in that region was probably flat, so we outperformed.

Our food business in that northern region was up 36%. I beg your pardon, up 9%. So we are seeing the benefits of both the stability of the supply chain platform coupled with the improved commercial execution pay dividends. Now the northern region is where we are furthest ahead on that. We still have work to do in the southern regions. So we are, as I said, it is a major area of focus for us and we see improvements coming through, and we see it coming through in the business wins, Joshua.

Yeah.

Are you talking across the entire fleet or just Europe, Joshua?

Okay. So, yeah, in Europe, as we came into this year, you know, we estimated that the industry capacity utilization was in the was in the low 90s. And in fact, in wine, in the high 80s. So quite a significant amount of spare capacity that drove competitive intensity and impacted pricing, I think, as the year rolled through and the ability to recapture you know, some of the excessive inflation that is been there due to the energy spike.

As we move through the year, we have obviously you know, resized and reshaped our own network. And from what we hear and from what we see on other announcements, as we move through the end of the year and into next year, we see the capacity utilization probably pulsing up to, you know, mid-90s, maybe a little higher. However, there is still significant overcapacity in wine in Southern Europe, and that continues to drive competitive intensity in that region.

You know, we have driven a lot of productivity to cover a lot of the costs, but I think as we look forward, it is going to be important that, we pull all the commercial levers at our disposal, PAFs, procurement initiatives, and so on to recover what is, you know, excessive cost increases this year. If we look to the Americas, capacity is tight throughout Latin America, maybe I would say touching in the mid- to high 90s. If I look at you know, Central America and particularly Mexico, probably mid-90s, and then in North America, capacities are pretty tight. So that is a kind of capacity overview but happy to take any follow-up on that.

Yeah. George, this is John. I will take. Hey, George. I will start with that. Those questions. If we take a look at 2027. Obviously, we had a target out there, you know, before and we pulled that for now and we are going to replace it with year end guidance in the next call as we indicated. The key challenges is that the base for 2026 has softened. Right? And so instead of believing that the, you know, the floor was about a billion dollars, we are looking at, you know, $925 million to $950 million.

So that made those previous targets particularly challenging in that regard. And so the first piece there is the base is softer by that, you know, call it sub-- $50 million to $75 million and that is a challenge. So now if we look at the various different pieces of the pie and I am looking at page 8 here, And just thinking first on more focusing on the EBITDA, You know, we do indicate net price is going to be up that is the hardest 1 to get a particular beat on.

We understand our inflationary view right now, but, of course, with most of, you know, 2-thirds of our business being open market, it is harder to get a read on that. Of course, as we indicated, we expect positive net price against an inflation environment that is clearly going to be still elevated. But not what we experienced this last year. Right? So we were coming off of a crest of cost inflation. We are behind a big bubble of cost inflation.

And we believe that cost inflation environment peaks on. Especially on the energy side in the first quarter and then starts to comp and move in the right direction. And I will touch base on your other 1 here in a moment. But then you have stable net sales. You have about a $170 million or more of Fit-to-Win benefits. We do believe that there will be some cost offsets so that, you know, other cats and dogs are working through like maintenance and things like that we are still refining through the through the budgeting process.

But those are the big pieces, the big open element obviously being the commercial element as you know, which is in front of us at this point in time. When it comes to on the energy side, you know, we have revamped our energy management practices. Okay. We, as you know, we benefited from a 5-year contract very favorable rates that expired at the end of 2025, then we kind of have a bit of a mark-to-market this year, a big bubble there.

Now we take a 5-year approach instead of a 3-year approach on energy management. And in the past where we would look to be substantially hedged going into the next year, for example, we look to be 100% covered on a rolling 12 month basis. And then obviously, it is stair steps down as you look into the future. So we are trying to take that approach to minimize the volatility that we see. And we also use various tools that allow us to either have, for example, traditional fixed forwards but other tools that kind of act like caps and collars where you can be protected within a range or a cap but allow you to benefit if prices come down off peak levels.

So as I indicated, the rates at which we have right now are definitely favorable to the forward curve that you see in the TTF right out there. You know, George, I cannot give you specifics on this because it is a competitive element, going into the next year. But, you know, we believe our energy cost inflation will have crested, and then we will be getting back into what we believe would be very competitive and relative to the marketplace of energy costs going forward.

Yes, I will just build on the comment that Gordon said is, you compare last year's market conditions and the pricing environment at that time. Relative to what we believe is shaping up. Last year we had low capacity utilization and obviously we internally had some struggles with some of the execution elements was talked about earlier. Going forward here, we believe the utilization levels and the backdrop supply demand is a lot better.

And given the level of inflation that we have seen, we have mechanisms through the PAS, at least it covers part of our business that pass that along on arrears Right? it is a-- if we are going to work on those, but they do recapture on the back end. And then there is just a lot of pressure in the marketplace with the energy. And there is no reason that we, OI, should have to, you know, sit on those energy costs. It should be shared within the supply chain. that is what we are looking to do. Accomplish. Okay. Thank you very much.

Yeah. Sure. Yeah. Thanks for the question. So, yeah, we intend to drive to positive free cash flow next year. Okay. That are, you know, obviously looking at the major drivers of the business. We are looking for higher EBITDA. We cannot quantify that just yet because of the last discussion we had on the commercial aspect of the business, but we are looking to drive the various different levers of the EBITDA in the right direction.

CapEx should be a little bit lower. We got $400 million there and we intend to be very, very, you know, conscious and with a lot of capital discipline, we want to make sure that we are maintaining our operations but we wanna be lean on the capital side. We are looking at lower restructuring costs, restructuring costs are going to be north of $100 million and close to $160 million this year. A normal year for us is $25 million to $50 million, but we did include it in the in the in the announcement.

We did indicate that, you know, we are looking to. We are working through the process of another furnace closure and there would be some additional cash being built on top of that, but significantly down on a year on year basis. 1 of the challenges we had in the back half of this year with the sales volume being softer in the back half than anticipated is the inventories are higher than we anticipated. So that has been an element working against us on cash flow next year We look to address that in next year to be able to get a neutral positive working capital. But we are still working through all those details. Those are, you know, the biggest moving pieces right now.

Yeah. And with regard to the Americas, you know, we despite those headwinds in the Andean, for example, and the energy issue in the Andean that business performed very strongly with nonalcoholic beverages up about 18% and beer up about 11%. And I think demonstrating the power of execution around Fit-to-Win and working closely with the customer across the chain. And likewise, in Brazil, you know, we had a standout performance where beer was up nearly 30% for us. 3x the market growth.

And our NAB, non alcoholic beverages, was up about 18%, where the market we estimate was up about 12%. So again, I think we are demonstrating the power of Fit-to-Win when it is properly executed, despite, know, tough macro environment. With regard to with regard to France, you know, a lot of our reorganization this year was in that region. And it proved more difficult than we had planned. You know, anything like social unrest, you know, while it is not good for society in general, it also makes you know, doing business tougher.

And it also impacts, you know, consumer sentiment. So I would say overall, it is a negative, but hopefully, you know, we will get through it and things will settle. But, yeah, it is not a positive.

Obviously, Very hard to quantify, and it depends how long it goes on. But, but our job is to overcome that. And we are very focused with a lot of our best resources focused on Europe to improve the results there, which I said are unacceptable to us. I can build on a few specifics here. If you take a look at our outlook, we did adjust the commercial outlook for the business. We did incorporate about a $10 million impact on the tariff element between The US and Canada.

We have about 2% of our volume move across the border. And so who knows how long that will endure, but that is probably, you know, the impact from a little bit in the third quarter to the fourth quarter of the year. You know, I did check that we do not have any operational impact as a result of the France upset but we have tapped down, as Gordon said, that the commercial outlook for the business because of factors like the tariffs and also the social unrest.

Yes, sure. So on the stable sales volume, our base case to your point is that you are probably looking at a softer probably core negative demand of a little bit. But as back to what Gordon spoke to on the on the call, we got about 4% of new sales that we have landed through working through the pipeline. So at this point in time, we believe that the benefit of those of those new wins will essentially offset probably the core you know, soft consumer.

And even our prepared remarks, I indicated then until the affordability issue change that you are alluding to, you are probably looking at core software demand. But overall, we think that states that sales volume is kind of a neutral on a year over year basis. So do not do not think that there is there is something, you know, necessarily working against it. Of course, we continue to fine tune this through year end when we give guidance.

On the net price, to your point, yes, after if you look over the last several years, there was a period of significant price increases in glass in Europe in particular. And then there is been some adjustments to that over the last few years You know, that was kind of a super cycle moving through the beginning of the and the energy at that time and then normalization. So that is probably played this course, but now we have another bubble cost inflation.

And as we have experienced this year and, as you know, we talked about a little earlier here, we recover our costs on arrears, through other mechanisms and stuff like that. So that is the process that we are working through. This is a, you know, historic process that we go through and with an improving backdrop of supply and demand, we feel confident that will drive into a positive net price environment and we will get more specific here. Yeah.

And, Arun, just to build on that, you know, with regard to Europe, we missed significant sales this year due to our supply chain issues as we reconfigure the network We obviously do not expect those to occur again. That coupled with, you know, our Fit-to-Win improvements in the European plants and improving the stability and the productivity and the capacity of the plants. And thirdly, as I said, the, you know, the execution of a much more disciplined sales force in the market.

Plus the wins as John outlined give us confidence that we can deliver on that kind of volume number. With regard to The Americas, you know, our business in Brazil, continues to power ahead. We are actually going to bring on a new furnace this year. The capacity of which is I say this year going into 2027, correct that. And, you know, most of that volume, we believe, has a home already and we continue to see our Brazilian business execute strongly in beer, in NAB.

We expect some upside in spirits as well. Likewise, in the Andean region. You know, the market overall is growing at about 7% for beer. We have consistently outperformed that market and we see no reason why we cannot do that. You in 2027. And also, you know, from a couple of years of decline in Mexico due to export tariffs and beer into The US and tequila into The US. We have that business around and are now growing volumes both domestically and in export, and we expect that to continue.

With regard to North America, while our financial performance was solid there, You know, our volume was impacted. By the tariffs, as John alluded to, but we also had 2 significant furnace rebuilds we do not expect to happen next year. And there is no doubt that during that process, we lost volume there, we do not expect that to, to occur. Plus a reshaping of the customer mix and weighting our portfolio more towards winning customers, I think, is going to help us in North America.

That business is executing very well, but has some, you know, external headwinds that we feel may soften certainly on the on the supply chain side for us next year. So you put all that together, you know, that gives us, a solid footing to deliver on the volume numbers that John mentioned.

Yeah, Arun, I will clarify on that point. So we believe that Europe based upon the information that we have is in the mid-90s. Not mid eighties. So for clarity, we believe the utilization rate has definitely improved. We entered the year more like 90 ish. And then and then through a number of the actions we did and what we understand is going across the marketplace, it has improved. And to your point, you know, we included in our announcement that we, you know, we are working to do a closure on 1 additional furnace over in Europe.

That factors into our position. We believe our system is in the mid to upper 90s. So, you know, we are we are working to improve the utilization rates within our system in Europe. In The Americas, we are in the very high 90s. We are basically a 100% in Latin America and in the very, very high nineties over North America too. So we believe that our system is getting in pretty good shape. Of course, we always look at, you know, supply and demand and what is going on in the marketplace to assess other decisions. But we have done a lot of work over the last 2 years and the network is looking pretty clean. Thanks.

Yeah. I would just say for competitive purposes, we cannot we cannot go there. You know? So that is all in front of us. And but when we do our guidance at the next quarter, be right in the midst of all the activity, and we will we will be able to provide that provide that specific guidance.

Yeah. So a couple of things. I mean, Francisco, as you know, it takes longer to you know, get to an agreed plan for any sort of significant change in Europe. You can execute that a lot faster in The Americas. And when we announced the plan between announcing it and, you know, executing it You know, it was the guts of 15 months by which time the actual environment, had changed. And particularly the supply chain environment has changed.

And so when we executed and we shut facilities and we moved you know, certain portions of volume into new facilities, that, required a rewiring of supply chain freight, freight lines, you know, customer reconfiguration, and so on. And a lot of the businesses that we work within that area you know, also experienced, you know, fairly explosive energy inflation. And that drove pricing. Some of the some of the freight capacity that we would have envisaged to help us in that reconfiguration actually left the market.

And so there was actually a supply chain squeeze, if I can put it that way. But, you know, not walking away from our own accountability there we did not execute that as effectively as we could have. We understand at a very granular level what the root causes are and we have, you know, we have we have bunched that into 4 areas of focus as we outlined.

And we are now just ruthlessly focused on executing that. You know, I can say this is a European-- Europe is not a mystery, you a lot of the same rules of execution apply at the end of the day. And, we have upgraded the team we have upgraded the resources, We know what to do. We have a rigorous plan, and that plan is reviewed you know, weekly and then sometimes daily to drive that drive that execution. We know how to execute things across the business.

We are demonstrating that in The Americas where, you know, we have driven a 50% increase in profitability in the last 2 years. And, you know, businesses like Brazil that had been faltering are actually now leading the market on foot of the Fit-to-Win disciplines and the TOE disciplines. So we will get it right. We are committed to getting it right, and it just has not come as fast this year given all of the market volatility.

So that is how we think about that, Francisco. 1 thing I would add there is because of the disruption that we had from the post restructuring that in Europe. We actually put on hold some of our Fit-to-Win related whether it is plant efficiency, procurement initiatives, things like that. The last thing we wanted to do was layer on another thing on the plants while they are trying to you know, unravel some of the supply chain challenges.

So and we and we included in our comments, we have deferred some of these projects and that is why you see some of it shifting into next year. We are not changing our objectives. In fact, some of these we have not even launched So it is a timing and sequencing with the extra disruption that we have had for the time being.

Yeah. And to give you kind of a detail on that, like, of our highest opportunity plants in Europe have not gone through Fit-to-Win or TOE yet. Okay? So that is all to come in Europe. So, you know, we, we know there is much more earnings power in this business. We have a we have a clear plan for executing that plan, and we commit to update on those 4 levers that we have outlined in the in the in the setup here this evening to. Or this morning to the market as we go forward on each earnings call.

Yeah. Sure. I mean, so, Francisco, thanks for the question. Yeah. Obviously, the leverage is getting higher. Our overall objective does not change. We believe that the business should be around 2.5x leverage. At 4.5x leverage, we are clearly outside of that range. Keep in mind, we believe that the factors that are driving that higher leverage are somewhat temporary in nature, not necessarily structural. And while it might take us a little bit longer to be able to right the ship and improve the core performance and restore the profitability in Europe. that is exactly the plan that we are trying to do.

To get us back into something that naturally delevers the organization. The good news is we have got plenty of room on our covenants. We got great liquidity in the business. We intend to be opportunistic on dealing with any near term maturities and things like that to make sure that we have good runway in the business. And, you know, as we as we indicated, you know, in our strategy, our strategy is Fit-to-Win, then profitable growth.

Then horizon 3 is to look at strategic optionality and what can we do looking at what is the right portfolio with the right balance sheet for the company going forward. And so, you know, all of that is work. It was always intended be the work of the business and it is still on the table as we as we look going forward. Of course, we have to include all the variables of business such as the balance sheet where we are at and what we think are our projections to be able to naturally delever against other alternatives. Thank you very much.

Yeah. You know, I think it is contained really in you know, in the in the deck, and we alluded to it already. I mean, the first the first thing we are focused on doing is strengthening the commercial performance. Right? We are well ahead in the Americas on that, okay? Where we still have opportunities to deliver on that in Europe. So that is first and 4 foremost is turning the competitiveness into or have the competitiveness executed by the commercial teams in the market.

So that is that is the number 1 priority. 2 is, energy management is. You know, it is it is a huge cost to our business. We have said before, it is about 20% of our costs. We were probably undercooked in terms of how we manage that. And we now break that down into 3 buckets. 1 is procurement. So working more effectively with probably a wider range of suppliers that bring different offerings to us. 2, risk management, so a much better grasp on forward curves how they operate, seeing where the opportunities are to manage risk and cost more effectively.

And we have upgraded the resources both internal and external that are helping us do that. And we are we are already seeing improvements in how we manage energy. The third element of energy is usage. You know, coming into the business, it struck me that there was not enough focus on an understanding of where the energy leakages were. We now of software and by the end of the year, it will be in every single plant, we can see energy in real time.

We have a dedicated energy management team that look at energy every week and work with the plants and provide resources to improve energy. The third 1 is turning the emerging competitiveness into profitable growth. And we really are demonstrating that in the Americas. We have had very, very significant wins of new business that is starting to flow in the second half. And will flow through next year. You know, currently, equating to 4% and a significant pipeline ahead of us yet to convert.

And finally, you know, there is no doubt our supply chain in Europe and our supply chain capability in Europe was undercooked. And it was found out when our restructure met a very intense energy disrupted inflated supply chain cost environment. And we have reconfigured the team, we have brought in new resources, We have a much, much sharper focus and between ourselves, the plants, and the customers. And so you put those 4 things together, and seeing how well we are already executing those in the Americas and the results coming through, it really is an execution focus for us in Europe.

And I am committed to that. I am spending a lot of my time there as CEO and they are-- it is no more. it is it is no more difficult than that, Michael, to be honest.

Yeah.

Oh, yeah. Well, the second 1, I guess, just following up. I guess the follow-up would be, you know, how central is Europe to your strategy overall? I realize it is been a decent business up until this year. But even in prior years, you guys have allowed your competition with respect to volumes, margins. Is there really a strategic benefit in having Europe? Is there a synergistic-- or other synergies between Europe and other regions?

And if not, you know, why hold on to it? Yeah. Look. it is it is the largest profit pool for glass in the world. And if you want to be a central player in the in the glass industry, then, you, I think you have to be in that market. And you know, it is a market that will continue to grow I think a lot of the macro trends are things like the microplastics and so on sustainability and so on favor glass. So. And it is a large market, over 22 million tons of glass.

The market has some challenges, but that is not a reason, we have had some challenges executing a refreshed strategy that we know is the right strategy. that is not a reason for us to leave that market. You know, we have a clear path, we have a clear plan, and we believe that can be, you know, a very profitable high returning business for us as we look forward. We are disappointed with the result, we own that result, and we have to fix it. And as CEO, I am I am committed to doing that. So, no, I think it is central to our to our platform, Michael.

Yeah. Thanks.

Yeah. So as we look at it right now, we entered 2026 at about 56 days IDS. This is an enterprise number. Okay? I am just using the enterprise number. We had expected through the actions we were taking through the restructuring through, you know, you know, growing the business, etcetera, that we would end up at about 50, 52 days. Unfortunately, with the softness in the back half of the year, we are going to end up at about 60 days.

Okay. So that is why you see that working capital change flushing through the outlook in the back half of the year. As we go into next year, keep in mind, we have been restructuring over the course of the year with another 1 that we are talking about right now. And a network that is in the mid- to high 90s in utilization. Rate. You know, assuming a stable background in the market marketplace, that is an environment where we can continue to chip away at inventory.

But, you know, we will give specific information about that at year end. You almost have to understand where you are gonna be at the end of the year, be able to understand where you are going to be able to do the next year, all the things that go along with those types of planning activities. But the idea is over the long term to continue to whittle down those inventories and drive favorable working capital it would certainly be good to have a little bit of help from the marketplace to be able to do that, but we will continue to manage those levers.

We need about $350 million of CapEx to maintain our operations on a regular basis. And that is what we spend. If you look on the last previous years on the last year or so, he is been the low $400 millions or so. But there were some years we were in the 100. We were building out capacity given the signals that we saw earlier in the decade to grow the business. We are not making those investments anymore. Right? So we believe we are properly maintaining the business and we are doing selective investments such as that furnace expansion in Latin America.

That Gordon referenced earlier. So at that point in time, I do not believe the asset events that we had have anything to do with the nature of those, you know, of those of the spend, you always have the question in trying to understand what is going inside of a furnace that is 3 thousand degrees. You can never completely get that down to a perfect science. And so at the end of the day, we believe that the spend is appropriate and we are maintaining our assets.

Yeah. Just to build on that, Anuj, you know, as we as we go through the TOE program in the plants and focus on improving the pack to pull and or the pack-to-melt and the pull rates, there is still late in capacity in the network that needs to be freed up or we will free up and you know, we are seeing that coming through, as I said, in The Americas very strongly where we have executed 2 e exceptionally well, and we have seen a release of capacity that we have been able to convert into new business and grow the earnings so. In those markets.

So we still feel there is, you know, between what John has said and the ability to extract more capacity out of the network as is. That we are well covered for the next couple of years.

Thanks, Jessie. That concludes our call today. 2 notes. Our year end call is scheduled for Wednesday, February 3, 2027. And with the transition to 2023 by 5 trading, please note our future earnings materials will be released the morning of the call rather than the evening before. And then in conclusion, remember to make it a memorable moment by choosing safe, sustainable glass. Thank you.