Ron Delia: Yes. Look, I mean we’ve been at it now for a while. We put about $670-odd million of price into the market in the quarter just to recover higher raw material costs, another $160 million or so to recover general inflation. It’s certainly not getting easier, but we are passing it through, and we’re recovering, and I think you can see that in the margins. The margins have expanded — excluding the dilution effect of the raw material prices going through the top line, the margins have continued to expand and not shrink. And I think that’s — it should give some confidence that we are out there recovering. It doesn’t mean that the conversations are getting easier. I think the consumers are probably starting to get a bit tired.
Elasticities, if they haven’t already are likely to increase. I think that’s what we’re hearing from most of our brand owners — brand owner customers. But at this stage, we’re still recovering, and we expect to continue to fully recover our inflationary costs in the second half.
Operator: Our next question comes from Mike Roxland with Truist Securities.
Mike Roxland: I appreciate taking the question. Just first one, just on the $120 million in cost takeout in SSG&A removal. Ron, can you comment on what regions you’re looking at and whether there are any particular end markets that you’re looking to restructure? And just quickly, on your Asian business, especially with China eliminating its color restrictions, have you seen any type of improvement recently in the volumes there? And was that a fact that you considered in your recent MDK acquisition?
Ron Delia: Maybe I’ll address the second question first, and then Michael can come back on the $120 million. Look, it’s relatively recent that China has reopened and then we went into the Chinese New Year in January. But we do expect that business to bounce back. More importantly, the China business has done an outstanding job managing costs. So despite the volume declines that ran alongside the COVID lockdowns, the business grew earnings in the first half, which was just an outstanding outcome. It’s been a business for us that has grown at least mid- to high single digits over many years. What’s really important in China is to be very focused in our participation strategies. Health care is a place we want to participate, and we want to go deeper in China.
And we’re doing that both organically, and we’re doing that through M&A., and the MDK acquisition that we announced last month is a good example of that. It’s a small business, one plant outside of Shanghai, complements very well, another medical packaging plant that we have near Shanghai as well. It brings us some complementary products that we didn’t have local production of in China, and it also expands our book of business with a new set of customers. So we’re pretty excited about that, and we think that’s all part of the long-term secular growth that we’ve experienced and will continue to experience in China. On the $120 million, do you want to comment on where we are at that?
Michael Casamento: Look at $120 million, I mean we see opportunities across the business. As Ron mentioned, there’s under 220 plants around the globe. It’s going to be focused on taking some plants out of the network and as well as SG&A opportunities to rightsize the business. So there is some focus in Europe. But generally speaking, we’ll see opportunities across the globe. So that’s to come.
Ron Delia: Wherever we can find EBIT — to offset the EBITDA we’ve sold is where we’ll be looking.
Operator: We’ll take our next question from Jakob Cakarnis with Jarden Australia.
