Paco Ruiz

Paco Ruiz of BNP Paribas requested further details on the supply and demand dynamics within the European market, particularly concerning the impact of supply cuts and the expected volume performance. He also inquired about the observed momentum of the "canned to glass" conversion trend, a key profitability driver, especially given the high cost of aluminum, asking if this driver is already evident in the current year.

Answer

CEO Gordon Hardie described Europe as having more spare capacity than the Americas, with significant overcapacity and price pressure remaining in wine (France, Spain) and mainstream beer, despite O-I Glass's and others' capacity reductions. He noted that the overall situation has tightened year-on-year, and pricing has firmed up, with O-I Glass's network expected to be "pretty tight" after actions complete by mid-2026. CFO John Haudrich added that net price performance in Europe is gradually normalizing and improving. Hardie also stated that the canned-to-glass switch has seen a significant slowdown in North America, though the price gap (canned vs. glass) is now more favorable for glass, which historically drives conversion. He acknowledged canned growth in specific European categories where glass is less suitable.

Paco Ruiz requested more detail on European market supply and demand dynamics, particularly regarding the impact of supply cuts and expected volume performance. He also asked if the driver of moving from canned to glass, especially given high aluminum costs, is already being observed or is still pending.

Answer

CEO Gordon Hardie contrasted the tighter capacity in the Americas with Europe, where more spare capacity exists, particularly in wine in France and Spain, leading to price pressure in those categories and mainstream beer. He noted that the situation has tightened significantly year-on-year, and pricing has firmed up, with European actions expected to drive uplift in 2026. CFO John Haudrich added that net price performance is gradually improving. Gordon Hardie also stated that the shift from canned to glass has slowed in North America, but the reduced price gap due to aluminum costs (now 10%-12% vs. 35% historically) makes glass more competitive. He noted canned growth in Europe is mainly in categories where glass is less suitable.