Ghansham Panjabi: I just want to go back to the, Anthony’s question on the caution, Ron, you referenced. Can you elaborate on whether this is a caution on any specific region between Europe and the U.S. and Latin America? Or is it just universal? I’m just trying to get a sense as to maybe some of the — just the moderation of volumes that we’re seeing is really a function of perhaps just catching up over the last year or so from previously depleted inventories, and now we’re just approaching a more normalization phase and an adjustment related to that.
Ron Delia: Yes. Look, I don’t think we know the answer to that is a short response to your question. The caution is based on the volatility that we’ve seen in demand patterns globally. Now if we look specifically in the second quarter, it’s more segment-specific in North America and Europe. And then we had some geographies where things got even more volatile as we went through the quarter, in particular, Latin America, where we saw some destocking but also just, we think, some softer demand in light of the deteriorating macroeconomic environment in several countries down there. China would be another one where we saw demand soften considerably in the second quarter, really concurrent with COVID lockdowns. Now obviously, those are behind us, we’d expect the business to bounce back.
But how strongly it bounces back is an open question. And look, as far as the drivers of volume in the quarter and even into January, how much is related to the consumer pushing back on prices that have been put through versus how much is destocking, it’s just — it’s difficult to read. So generally speaking, there’s been volatility across the business, and that adds up to a degree of caution on our part.
Ghansham Panjabi: Okay. Understood. And then just given the increase in interest rates, I mean, obviously, it’s a big headwind between fiscal year ’23 and fiscal year ’22, just for everybody, really. How are we thinking differently, if at all, in terms of allocating cash flow towards buybacks versus debt paydown?
Michael Casamento: Yes. Look, the interest rates where they are for us, the buyback still makes sense. It’s EPS accretive. We have strong cash flows, and we regularly been doing buybacks, and we’ll continue to do that where the interest rates are. It still makes sense from that perspective.
Operator: We’ll take our next question from Daniel Kang with CLSA.
Daniel Kang: Just interested on the impact of destocking, I know it’s quite difficult to quantify. But can you estimate how much it contributed to the volume softness in both Flexibles and Rigids? Are you seeing any green shoots at this point in terms of the destocking cycle coming to an end? And just wondering what you’re assuming in terms of destocking in your guidance.
Ron Delia: Look, Daniel, it’s a difficult one to estimate. I mean I think you’d have to triangulate a few different data points. If you look at the scanner data and look at the results of other public companies that have reported, volumes were down considerably. And in light of those comparisons, our volume performance was actually good. But when we know anecdotally in certain segments, particularly in coffee, single-serve coffee in Europe, some of the dairy segments in the U.S. meat in Europe, we know in some of those places, including Beverage and the Rigid Packaging segment, that there was excess inventory in the system. And we know that because customers took shutdowns in a way that they haven’t in the past, meaning longer shutdowns.
So, it would be very hard to parse out the volume performance of the half. The volumes were down 1%. I think that probably compares favorably to the other external markers out there, but it would be really hard to parse that 1% in terms of what was destocking versus what is just a softening consumer environment given the price increases that have been put through in pretty much all segments and all regions.
