O-I Glass, Inc. (OI) Earnings Call Transcript & Summary

Good morning, and welcome to Citi's 2021 Basic Materials Conference. I'm Anthony Pettinari, packaging analyst here at Citi. And we're very pleased to host Andres Lopez, CEO; John Haudrich, CFO; and Chris Manuel, VP of IR of O-I Glass, the leading global glass bottle manufacturer. Andres is going to lead off with a discussion and some slides, and then we'll jump right into our discussion. And for those on the line, they can submit questions to me through the portal or just e-mail me also if you need any disclosures. So Andres, I'll hand it over to you.

Thank you, Anthony, and the Citi team for hosting us today. John and I will provide a few prepared comments, including an overview of O-I Glass, our key 2021 priorities and long-term strategy to increase shareholder value. Afterwards, we will be happy to take your questions. For those of you who are listening but unable to see the materials on your screen or who wish to review them at a later time, the slides we are using are available on the company's website. Please review the safe harbor comments on Slide 2 and various disclosures found on both the slides and the website. On Slide 3, you will see a high-level profile for the company. O-I is the global leader in glass packaging. We serve the highly stable and steadily growing food and beverage industry supporting more than 6,000 customers. These customers highly value our dedication to service and our own parallel production network to meet their needs across the globe. As the industry leader in innovation, we are proud to make glass the most sustainable packaging solution. Likewise, it is a preferred substrate by most consumers given its premium characteristics and their increased focus on health and wellness. Looking at Slide 4, we have laid out the key elements of our strategy to enhance the stakeholder value as shared during our recent Investor Day. The combination of favorable market conditions for glass containers, O-I's ongoing transformation and the introduction of MAGMA are building the path to YES! Yes to profitable growth. Glass is poised to benefit from key mega trends such as wellness, sustainability, premiumization and [indiscernible]. Given these trends and a revitalized commercial approach, we are investing in new capacity to enable growth opportunities within our strong organic commercial pipeline. YES! to an agile and resilient company. Our transformation is well underway, and I believe recent performance demonstrates the momentum we're building. We expect significant benefits from our ongoing margin expansion initiatives. We are expanding our portfolio optimization program to realign our business portfolio, fund organic growth and improve our return on invested capital. Also, we intend to resolve legacy asbestos and pension liabilities that have hamstrung the organization for decades. Finally, YES! to a new, more sustainable paradigm for glass enabled by MAGMA. This new breakthrough solution provides a host of additional capabilities that build on top of our world-class heritage network. With MAGMA, we can meet the needs of an evolving market and expand our business. These efforts are set to accelerate O-I's transformation through profitable growth, improve financial performance and value to all stakeholders. We are excited about the future, and we believe O-I represents a compelling investment opportunity. Moving to Slide 5. First, let me emphasize that we expect glass will benefit from key mega trends that reflect changing consumer preferences. The pandemic has only accelerated the wellness strength as consumers increasingly focus on healthy living habits. Glass is all natural and inert. It will not contaminate the product content. In fact, it's the only package that is recognized as safe by the U.S. FDA. Consumers want a premium experience, and our customers want to differentiate their products on the store shelf, given brand proliferation in recent years. The appearance of a glass container alone can identify the brand, transformed the ordinary into the extraordinary and build a consumer connection unlike any other substrate. With increased urgency around climate change, consumers increasingly demand air-friendly products. Glass is all natural, reusable and 100% recyclable. It is a great fit for the new green economy. As you can see on Slide 6, these trends are expected to drive growth in glass demand. On the left, the chart provides the page supporting the 1.6% projected global volume growth broken down by region. Considering O-I's higher presence in the Americas and Europe, the implied growth rate should be even higher. As shown on the right, we illustrate the various end-use categories and the relative affinity for glass. As you can see, glass and alternative packaging like aluminum cans increasingly play in different lanes. Importantly, O-I is well aligned with premium categories where glass is strong and has minimum presence in categories where aluminum cans have a strong presence, which are the ones driving their growth. I'm now on Slide 7. While markets have been shifting in our favor over the past few years, we have also been hard at work transforming the company. As you can see here, we have built a simple, agile and effective organization, optimized our structure and improve the cost position of our operations. This includes building the strongest commercial pipeline I have ever seen at O-I. We have achieved over $240 million of benefits from our margin expansion initiatives and completed over $1 billion of asset [indiscernible] as we optimize our portfolio and reduce debt. Likewise, we have an agreement in principle for the resolution of legacy liabilities that have hamstrung the business for decades. The appendix does include a recap of the key next steps as we seek to conclude the Chapter 11 process in 2022. As a result of these efforts, O-I has consistently delivered on its commitments over the last 7 quarters despite major market volatility. We have passed an important inflection point, and we are set to accelerate our transformation as we begin implementation of MAGMA to enable profitable growth. On Slide 8, you see a summary of the benefits of MAGMA. Our heritage network is a great fit for many of the categories we have served for decades. Given the trends that I just mentioned, health, wellness and sustainability, there are significant future opportunities in a broader array of end-use and use categories, which tend to be more differentiated and fragmented. MAGMA is a perfect fit to expand in these categories. MAGMA is more flexible and scalable and can be more rapidly deployed. It can be co-located to improve supply chain efficiency. It is more cost effective with lower capital intensity. Likewise, MAGMA enabled significant container lightweighting and will enable future use of carbon-free energy sources like hydrogen or biofuels. So it increases convenience and sustainability. MAGMA represents a major leap forward in how glass is produced. We expect MAGMA expansion projects will generate returns in excess of 20%. Let's turn to Page 9. Building our growing commercial pipeline and leveraging MAGMA, we are expanding in premium markets across premium categories with premium technologies. We intend to invest up to $680 million to enable up to 6% new capacity over the next few years, which supports our 1% to 2% CAGR projection. This includes up to 11 new MAGMA lines in highly [ over sold ] markets across Latin America and Spirits in the U.S. and the U.K. These are all attractive projects with about 20% returns. Customer feedback has been very good, and we now have already secured customer agreements or contracts for more than half of this expansion capacity. Moving to Slide 10. We are redeploying capital to fund this growth. We recently expanded our portfolio optimization program to $1.5 billion. While all of our divestitures today have helped us reduce debt, future proceeds of around $600 million will help fund our expansion projects. As a result, we will divest noncore assets. We deploy the proceeds to expand in attractive high-return projects and improve our return on invested capital. Importantly, this will allow our strong underlying free cash flow to support further balance sheet improvement. Now let me turn it over to John to discuss our short-term and long-term financial outlook.

Thanks, Andres, and hello, everyone. We have summarized our updated business outlook on Slide 11. As we wrap up 2021, the fourth quarter is proceeding well. Sales volume is up around 2% quarter-to-date, which is tracking ahead of our guidance of flat sales. On the other hand, FX translation will likely be a headwind given a stronger U.S. dollar. Overall, we are reaffirming our fourth quarter outlook of $0.30 to $0.35 per share and full year cash flow of at least $260 million, subject to FX trends and any unforeseen impact of Omicron. Additionally, we provided some preliminary thoughts on our 2022 outlook. Overall, we expect sales volume will be stable to up about 1%. This does account for some continued broader supply chain disruption and the fact that we are capacity constrained in important markets and end-use categories until our expansion initiatives take hold. While we do anticipate system-wide cost inflation, we believe there is limited risk that demand for our product will slow down significantly. Glass serves a generally stable food and beverage market, and many of the value categories like North American mega-beer have already been rebased. Also glass has proven resilient amid the pandemic, given channels just between on-premise and off-premise. Likewise, glass serves more premium categories that tend to have less price elasticity. Finally, we are significantly capacity constrained in many markets, and pent-up demand provides a buffer to absorb potential fluctuations. We are also confident that higher selling prices will offset incremental cost inflation as well as recapture the unfavorable spread incurred during 2021. Approximately 55% to 60% of our business is under long-term contracts that include price adjustment formulas that pass through our cost inflation. Most contracts reset in January, but in some cases, costs do pass through quarterly or monthly such as energy in North America. The remaining 40% to 45% of our business is repriced each year, and that effort is currently underway with a keen eye to recovering cost inflation. We also anticipate good momentum with our margin expansion initiatives. CapEx will be elevated next year as we invest in our capacity expansion, yet this will be substantially funded by proceeds from our portfolio optimization program, which should be received in advance of project cash outflows. As Andres noted, we expect strong adjusted cash flow, which will support further balance sheet improvement. We have also included the longer-term target shared during our recent Investor Day. In addition to higher sales volume, we expect adjusted earnings will improve to between $2.20 and $2.40 per share, with corresponding improvement in adjusted free cash flow as well as lower leverage by 2024. This represents an average 8% to 12% adjusted earnings CAGR over the next 3 years. Now back to Andres.

Thanks, John. As I wrap up, let me add a few comments on sustainability. Glass is the most sustainable packaging option. Glass is 100% recyclable. It is reusable and a perfect fit for the circular economy. Glass is all natural and inert. Even if discarded, it is never trash. As such, it is both Earth and ocean friendly. Importantly, glass is locally produced and sold with our reliance on a carbon-intensive global supply chain. In fact, glass is already what other packaging options aspire to be. Currently, we have many efforts underway to improve our operating efficiency and recycling rates. As I mentioned earlier, MAGMA will significantly improve our sustainability position. With MAGMA, we can reduce our emissions, use a broader array of recycled content, reuse the weight of our containers, near or co-locate with our customers to reduce transportation and run on renewable energy sources like hydrogen or biofuels. I believe you will be hard-pressed to find a manufacturing company producing a highly sustainable product with so many levers to further improve it's sustainability position. Of course, sustainability isn't just about emissions. As you can see on this page, we have a set of ambitions and holistic [indiscernible] goals. And I invite you to review our new sustainability report issued during the third quarter. Let me wrap up with a few comments on Slide 13. O-I is performing well, reflecting improved capabilities, agility and resilience. As a result, we have consistently delivered on our commitments despite a number of macro challenges and uncertainties. O-I is a market leader in innovation and ESG. We are transforming O-I, and our multiyear margin expansion initiatives are gaining the steam. MAGMA is advancing well and will unlock significant growth opportunities. Finally, we are resolving legacy liabilities and improving our structure. We are building a path to YES! Yes to an agile and resilient company yes to a new paradigm for glass and yes to profitable growth. As a result, I believe O-I represents an attractive investment as we accelerate our transformation. Thank you for your interest in O-I Glass. Anthony, we're now ready to take questions.

Andres, thanks for that very helpful detail. Maybe just starting off, you talked about the updated '22 outlook on Slide 11, volumes up 0% to 1%, confidence that price will recover '21 costs. Can you just discuss maybe some of the key assumptions around those targets? And what really drives that confidence? Maybe first on the volume assumption and then on the price cost. In terms of what underlies that confidence? Whether it's the contracts you have in place, the discussions you're having with customers, maybe the competitive intensity that you're seeing in the markets? And then you talked about a large number of contracts that reset in January. Maybe just any thoughts ahead of that, that you can share.

Yes. So Anthony, the -- when we look at the markets around the world, they're quite strong at this point. We're seeing that glass is really resilient to both the on-premise and the off-premise. As an example, if we look at the latest numbers in Europe, in the Southern Europe countries, which is where we have the largest presence, the both channels are performing really well, strong with growth year-on-year, even though on-premise is fully open. We're seeing an improvement in the domestic beer in the United States. So the slowdown rate -- the rate or decline is slowing down and is out on a smaller base. At the same time, premium beer and international brands are growing, which are mostly offsetting that decline. And as you know, the U.S. has been really our challenge for the base business. So we believe that can perform better for the 2022. When we look at the Latin American countries, their really strong demand for premium beer is quite strong. If we look at the Andean food, it's growing quite well. In Brazil, all categories are growing in glass. We are sold out in those countries at this point. Mexico is also performing quite well. It's both export and local market. So all markets have pretty strong fundamentals, and that takes us to believe, along with the projections that we have available from third parties like Euromonitor, that there is -- there are very solid fundamentals for glass in 2022. When it comes to recovering price, we believe that based on the procurement progress that we have in place to mitigate some of this pressure on the inflation and all the commercial efforts for pricing and the constructive environment that you see in all the markets at this point in time that we will be able to recover inflation in 2022. We're very comfortable that will be the case. John, do you want to...

Yes. Maybe just a couple of other points on top of that. When it comes to the spread, going into this year, we anticipated some negative spread. But at that the same time, inflation actually has significantly increased since that time. Yet our spread this year is about what we expected heading into the year. So we've been keeping up a lot with a lot of the inflation pressures which -- so we got momentum. We have good efforts underway through our revenue optimization to get price. And so we feel confident that it's not like we're flipping a switch on, on January 1 to get price recovery. We've been hard at work over this for a period of time. And when it comes to the volume, we have an outlook of 0% to 1%. To Andres' point, the underlying demand is actually a bit -- quite a bit stronger than that. But we are eliminating to that 0% to 1% because of the supply chain challenges, but mostly because of the capacity constraints that we have in our business. And the last thing I would say is coming into 2022, we also are looking for those margin expansion initiatives, which we've been doing really well with, $50 million. We're going to do better than that this year. So that's another thing fully within our control to be able to manage to drive that performance in 2022.

Okay. That's very helpful. One follow-up question that we did get on price cost was specifically around Europe and concerns around sort of natural gas into the winter and not only the cost, but maybe the availability. Just wondering if you could talk a little bit more about price cost in Europe and what you're seeing there?

So let me cover first the demand. So it's very difficult to know how the winter is going to play out. However, when we look at our capacity where it is located, in which countries it is, the suppliers we have and the contracts we have in place, we feel very comfortable with the current information available that it is a low risk for us. Most of the pressure is really in the North of Europe, where our presence is smaller. So we believe it's a low risk. Now the pricing environment in Europe is very constructive. We have the mechanisms. We have the policies and the actions in place commercially and procurement wise. That takes us to believe we are in a good position to recover inflation as we go into '22.

Got it. Got it. And then you talked about capacity constraints and supply chain headwinds impacting that volume number. Is there any way to think about how shipment growth might look absent those headwinds? I mean, is it -- in terms of underlying demand, is it a point or a couple of points? I mean just very broadly, directionally, how do you see the market right now?

Yes. So I mean if we're looking -- if our guidance is up -- flat to up 1%, we would probably be looking at 2%, maybe a little bit better even if you look at fundamental demand. And so that's the differential between what we believe is -- where the market is heading and where we are with those other variables.

Got it. Got it. And...

Anthony, perhaps something to add. When we look at the Latin American markets, the demand is so high versus our capacity right now that, that almost provides a natural protection right there, because there is a lot of demand that isn't served right now. So even if demand is slowed down, there is still protection for that. So that's why we're putting in place the capacity that we share with you in Investor Day.

Andres, on that point, can you talk a little bit more about that LATAM demand trend? I mean, supply has been tight in Mexico and Brazil and the Andres. And it seems like demand is exceeding pre-pandemic levels. Can you talk a little bit about glass's sort of market share? Is that returning to normal? It seems like it fell during the pandemic. And then any comments around the strength in end markets and beer, wine, spirits and just the confidence that, that -- it persists.

Yes. So premium beer is growing really well in all those markets. And that's what was driving most of the demand. Global brands are growing really well. When it comes to recovering positions, in Brazil, for example, returnable glass that dropped during the pandemic is back to 40%, which was the pre-pandemic level. One-way glass is up 9% share of the total packaging for beer, which is coming from 6% or 7%, so it's even higher than it was before. Premium products are growing really, really well in those countries. Now all categories in Brazil grow. When we look at the Andean, beer is the major driver, but food is very strong. And when we look -- go in to Mexico, I mentioned exports and local market. Experts are driven, for example, by Tequila exports, which are growing really well; NAB's exports, too; and beer exports. And in the local market, it's all categories in Mexico. So all markets are quite healthy. And the premium trend is very important for this growth in Latin America, but also in Mexico, but also in the other markets in which we operate.

And one thing I would add is I don't think that our market share ever really dipped. We did have the unfortunate forced curtailments across a number of the markets during mid part of last year. But once that was up and running again, we were high single-digit to double-digit type of growth. And across Latin America, that's persisted for quite some time.

I'd actually add one other point, too. I mean if we don't add this capacity in these Latin American markets, it's going to -- there's the demand by customers, it's going to find its way into another substrate. They prefer and they want glass. That's why we need to keep up with it.

Yes. Something that is very important that is taking place that change versus the pandemic is champagne performance is very strong, bottled wine is very strong. Prosecco was strong and continues to go stronger. Italian wine. So all those categories are really performing well. Beer in those countries is performing really well, too. And I think something important to keep in mind is the U.S. market and domestic beer. That has been compromising our performance for organic growth, if you will, or the stability of the base for a few years back. We are seeing a stabilization of that in our numbers now. The decline rate is slowing down. It's out of a smaller base. And the premium and the international beer is growing. That's very important. And in the past, it was a significant pressure in our volumes.

Got it. Got it. That's very helpful. On the turnaround initiatives, you raised your margin expansion target for '21. Can you just talk about sort of what allowed you to realize more cost savings than you originally expected? Does the '22 target of $50 million maybe potentially have some upside? And then just maybe a bigger picture question. I mean, Andres, it seemed like in previous years when there was supply chain stress, O-I was really the first to see it, and you had some very difficult quarters. And the performance this year from a supply chain perspective, in a very difficult environment, has just been much better and has surprised a lot of us positively. So I'm wondering if you could talk about sort of what -- how you're running the business differently versus previous cycles or previous iterations of O-I that has allowed you to run more smoothly in what is really an unprecedented environment?

Well, there are multiple things. The margin expansion initiatives are really the application of the capabilities we've built over the last few years. And we spent good time building them. They are quite strong, and now we're using them, leveraging them for the 3 margin expansion initiatives. Obviously, momentum has been building because we learn more and more and we're applying them better and better. So we expect to continue a strong in margin expansion initiatives. When it comes to supply chain, I can give you an example. We mentioned before that we implemented IBP across the company. That is a very important and a very different way to work all the supply chain in the organization. It took us 3 years to implement it. We trained more than 1,000 people to be able to do it. So now we are enjoying the benefits to have that. Any comments, John?

Yes. I would just -- on the margin expansion initiatives on your first question, how did we achieve more. One thing Andres mentioned is really the margin expansion, this is -- aren't just costs. They're actually all aspects of the business. So we've got a revenue optimization, we have factory performance and then we have cost transformation, which is our SG&A activities, okay? So really, as I mentioned earlier on, we've done a very good job keeping up with the extra inflation through better pricing, that's value-based pricing, a lot of other tools that we apply to be able to get the most out of our contractual situations with our customers on a set of circumstances. That has actually done a lot better than originally gauged, obviously, against a more challenging background. Factory performance, we consistently see month after month that the operation, to the point that Andres was talking about, just -- it's gelling to the point where the operating performance and efficiencies are a lot better than, frankly, we anticipated there. And same thing on the SG&A side, as you know, that we're taking pretty affirmative actions on working with what we call our managed services activities and a lot of other activities that we're doing to try to manage our costs out of the system. And so by this time next year, we expect 30% or so of our staffing levels over the last few years will have been reduced as we look to streamline the organization, consistent what Andres just talked about.

I think complementing the capabilities we mentioned, the organization has been redesigned. It's a lot simpler. We have 1 single point of accountability for any given key metric. We want to move forward. The communications and connection lines move very fast. So it feels very different in here.

Great. Great. That's extremely helpful. Just shifting gears to MAGMA. I mean you gave some helpful information on expected returns. When you -- in terms of conversations with partners and customers, can you talk about how MAGMA is being received? Any way that we should think about sort of operational risk or technology risk over the long term? Are you aware of any competitors that are maybe making similar strides in reducing fixed costs of glass manufacturing? Just any thoughts there?

Yes. So the -- it's been very well received by customers. And there are a number of things that are good about MAGMA that they would like to have supporting them. So that's been the reaction. When it comes to competitors we haven't heard, we don't know. We are not aware of anything that is similar or close to that under development. When it comes to risk for Generation 1, Generation 2, we don't need inventions. If everything we need to do is about engineering and finalized processes. Generation 2 is in piloting at this point. It's in pilot. Generation 1, we continue to make improvements in that. Generation 3 needs some invention, and that's something we are advancing at this point. Every sign that we get in every milestone, every output we get out of every milestone has been very encouraging. So that's the current position with regards to MAGMA.

I would just say connecting that to the growth that we expect over the next few years, keep in mind that the growth that we're anticipating the capacity we're putting in, in the next 12 months is primarily still heritage technology. The expansion that we primarily we have done in the Andean for example. So we'll be able to put that in with legacy technology to meet today's demands, right? And then forward after that -- after those installations, it will shift over to MAGMA. So we got -- still got about a year before we start relying on the MAGMA technology as far as our expansion activities.

Got it. Got it. And John, I mean, you highlighted your leverage targets. I mean can you talk about sort of the prioritization of potential debt paydown versus investment in MAGMA? And just maybe more broadly, capital allocation priorities?

Yes. Yes. One thing I'd like to emphasize is that when we talk about funding MAGMA, it's all going to be funded effectively by the portfolio optimization that we're doing, the divestitures of noncore business. I guess you also include some sales leasebacks to be able to monetize high-value properties and things like that. So none of the investments that we're anticipating for expansion are coming out of the core cash flows of the business to all, okay? So they're going to be funded. So ultimately, the underlying cash flow of the business is still going to be applied to debt reduction, just like we were planning to do before we announced any of the expansions or the increase in our portfolio optimization program. So as a result, we're very confident that we can go and continue to reduce the debt. And we have provided some information during our Investor Day that we expected to get to around the mid-3s on leverage. But that's -- keep in mind, that's after absorbing like a 0.5 or 0.6 leverage because of funding [indiscernible], which is really just a transfer of 1 liability on the balance sheet over to the reported debt side. So it's kind of neutral as far as total leverage for the business, but just a certain amount. So as a result, if you're talking about 0.8 or so of a turn reduction and levered over the next 3 years, which we think is very valuable to our investors and the ability to transfer enterprise value.

And John, in terms of the funding MAGMA and the portfolio optimization activities, and we were talking about this a little bit earlier, but can you just spell out some of the drivers of that $500 million, I think, that's remaining?

Yes. Yes, sure. So it's a combination of things. So you have seen examples. I mean we just recently announced the sale of our Le Parfait brand and business over in Europe for about USD 84 million. you can see -- we're still making the glass for it, but we sold that off a brand. And there are some other various elements of our business that when you look at them, aren't necessarily truly core of the production and manufacturing of glass. So that will probably be up to half of the remaining balance. And half or more of it will be associated with sales leasebacks. And this is a great way to monetize high-value property at very attractive capitalization rates given the interest rate market that we're working in right now and basically front the cash to be able to move it into what we think is much more attractive growth, high-return type projects, such as what we reviewed, like 20% type of returns. So it will be a little bit more than half or more than half on sales leaseback, the other half are these noncore asset sales.

Got it. Got it. And then just pre-MAGMA and post-MAGMA, can you talk a little bit about sort of the long-term competitiveness of glass versus beverage cans and PET bottles? I guess, one, from a cost perspective; and then, two, from a sustainability perspective?

So when it comes to the cost perspective, we expect to close the gap between us and, let's say, key alternative packages by up to 50% to 75%. So that will be a significant change. Deploying this capacity will be a lot faster. So half of the time. And today, we don't get, as an industry, too many opportunities because it takes time. And it only takes time, but capital intensity is quite high. We expect that the capital intensity will be reduced by up to 40%. It's a world in which we can colocate. We can near locate. We can relocate. We can scale up capacity. It's a very different business model really in terms of the possibilities that we have with that technology versus the assets of today, primarily for a market that is becoming so diverse, so fragmented, so rapidly changing. So growing and growing. So following the role with this technology will be a lot easier.

And I'd just add a couple of things on top of what Andres said is you can do all that and still provide the premium image of a glass container. You can design unique shapes and designs and colors that stand out on the store shelf rather than the kind of the see the sameness that we all recognize on the store shelves. And we can do it at -- ultimately at 30% lower weight of the product, which will meaningfully change the sustainability, the look and feel and the attractiveness of the package from a convenience standpoint.

Yes. And we expect to have MAGMA running with biofuels from hydrogen when economically available. So that will be a very different proposition.

And is the sustainability proposition, is it being received differently in Europe than it is in the U.S. for glass? And do you anticipate that to change? Or is Europe leading the U.S.? Like what do we need to see in the U.S. maybe to have glass? Yes.

Well, I think that the awareness and the termination to act in those areas is increasing in the United States and is increasing quite rapidly, which is good for us. Because there are things like recycling, which there is a lot that can be done with glass recycling, Europe has demonstrated that the rates are very high. I think the more we have increased interest in the United States, the better we can work around that to improve our recycling rates. But the -- obviously, Europe is ahead in all dimensions of sustainability, obviously, years ahead. But that we're seeing a significant increase in interest in the United States.

Yes. One thing I'd add is between 40% and 50% of our business is, well, with our top 20 customers, and those are your global multinationals. And whether they're operating in Europe or North America or Latin America, they're operating as 1 entity and trying to pursue their sustainability goals. So a lot of that is driving interest and stability in all the markets that we serve, not just Europe or North America.

Great. Great. Well, Andres, John, Chris, we're coming up on time, but I really want to thank you for your time. And really, the progress at O-I has been pretty impressive this year. So look forward to staying in touch for the remainder of the conference and into the end of the year. So thank you.

Thank you, Anthony.

Thanks, Anthony.

Thank you.