Oct 28, 2026 earnings call — Europe recovery and updated 2026 outlook
Company updated 2026 adjusted EBITDA outlook to $925 million to $950 million and lowered near-term outlook.
Revenue $1.6B (est $1.6B) · EPS $-0.09 (est $0.16)
Key quotes
"Europe remains our largest opportunity to improve financial performance."
"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."
"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."
Analyst Q&A 7
Europe commercial recovery details
Q (Josh · Baird): Analyst asked how OI's commercial execution in Europe underperformed, what must be fixed, and specifics on the recovery plan and wins.
A: Management said they reorganized sales and how they manage it, tightened execution this quarter, and are seeing wins that equal 4% of annual volume. They said northern Europe is ahead, southern Europe still needs work, and they have new commercial talent and focus.
"We are we have made a lot of progress in this quarter tightening up and executing the system that we had envisaged." — Gordon J. Hardie (CEO)
2027 outlook and energy hedges
Q (George Staphos · BofA): Analyst asked whether a 2027 target would be higher or lower than prior plans, the pieces behind the outlook, and how energy hedges affect 2027 costs.
A: Management said they pulled the prior target because 2026's base softened to about $925 million to $950 million, lowering the starting point by roughly $50 million to $75 million. They said Fit-to-Win gives about $170 million, they expect positive net price versus still-elevated inflation, and they are using longer 5-year hedging and other tools to reduce energy volatility.
"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." — John A. Haudrich (CFO)
Free cash flow and France impact
Q (Brian Bergmeyer · Citi): Analyst asked if free cash flow will be positive in 2027 and for sizing of cash items; also asked if France social unrest affected demand or results.
A: Management said they intend to drive to positive free cash flow next year, with lower CapEx, much lower restructuring cash, and work to reduce inventories and working capital. They said France's social unrest is negative for doing business and consumer sentiment, and Europe reorganization proved more difficult than planned.
"With regard to France, you know, a lot of our reorganization this year was in that region." — Gordon J. Hardie (CEO)
Volume assumptions and global capacity
Q (Arun Viswanathan · RBC): Analyst asked why management expects stable volumes in 2027 despite inflation and weaker demand, and asked about global capacity/utilization.
A: Management said stable volumes reflect offsetting factors: slightly softer core demand but about 4% of new sales wins that should offset that softness, plus Fit-to-Win and plant improvements. They said Europe utilization is now mid-90s, Latin America near 100%, and North America in the very high 90s, and they are closing an additional European furnace.
"So we believe that Europe based upon the information that we have is in the mid-90s." — John A. Haudrich (CFO)
Pricing, restructuring in Europe, and debt level
Q (Francisco Ruiz · BNP Paribas): Analyst asked what price level is needed to offset inflation, whether Europe’s new plan (Fit-to-Win 2) will work versus asset constraints, and whether the company is worried about leverage and other debt actions.
A: Management declined to give specific price levels for competitive reasons and said they have a clear plan, upgraded teams, and deferred some Fit-to-Win projects so timing shifted into next year. On leverage, they said 4.5x is above their target and the business should be around 2.5x, but current higher leverage is driven by temporary factors and they have covenant headroom and liquidity.
"We believe that the business should be around 2.5x leverage." — John A. Haudrich (CFO)
Internal fixes and importance of Europe
Q (Michael Roxland · Truist): Analyst asked what internal steps OI is taking to improve results, manage uncertainty, and how central Europe is to strategy.
A: Management said they focus on four priorities: strengthen commercial performance, improve energy management (procurement, risk tools, real-time usage), convert competitiveness into profitable growth, and fix Europe's supply chain with new resources. They said Europe is the largest glass profit pool and central to their platform, so they will keep investing to fix execution.
"The first the first thing we are focused on doing is strengthening the commercial performance." — Gordon J. Hardie (CEO)
Inventory levels and CapEx risk
Q (Anuj Shah · UBS): Analyst asked whether under-absorption from working down inventories could hit EBITDA in 2027 and whether current CapEx guidance risks underinvestment.
A: Management said enterprise inventory days rose from the planned ~50-52 to about 60 days due to softer back-half sales, and they intend to chip away at inventories next year as the network stabilizes. On CapEx, they said roughly $350 million is needed to maintain operations and $400 million guide is appropriate, with selective investments like a Latin America furnace and confidence they can extract more capacity via plant programs.
"As we look at it right now, we entered 2026 at about 56 days IDS." — John A. Haudrich (CFO)