Oliver Graham: Thanks, Gabe. Yeah. Look, on the second, I think nothing that we didn’t already signal. And if anything, as I said, I think by Q2, we might have found some offsetting cost improvement to some of those price volume effects that we mentioned in the Q4 results and mentioned in our guide. But obviously, we’re not pretty confident in those yet, so we’ll wait till Q2. And then, I think on your first question on the drag, we think it’s probably of the order of about $40 million exiting the year with the closures taking effect. So we’ll have the full year effect of the closures by then and also, hopefully, have grown into the capacity as per our guidance.
Gabrial Hajde: Okay. Perfect. And last one, and I apologize, Oli, I think this came out relatively this morning, but mentions of a new Bev can plants actually starting up here in the Northeast, KJ Can. Curious, if you’ve heard anything about it from your customers?
Oliver Graham: Yeah. I think that’s the one we did know about unless they’re doing a second. So I think we knew about that one. I mean, our overall experience of the U.S. market at the moment is that they’re a good operator at the smaller players and the independents are struggling a bit in the market with the — but obviously, there is some capacity and also operationally, some of those situations have been difficult even for one of the bigger players that’s come into the market. So I don’t think we have any new reaction to that. I think what we can see in the market is decent growth in certain segments. We’ve got good growth, and we’ve got confidence, I think, that growth is going to resume as pricing normalizes and we stop having some of the shocks that we’ve had the last couple of years. So I’m not too concerned about other parties in the North American market at this point.
Gabrial Hajde: Understood. I mean we tend to agree with you on demand, at least what we’re seeing on the promo activity. Thank you and good luck.
Oliver Graham: Thanks, Gabe.
Operator: And our last question will come from George Staphos with Bank of America.
George Staphos: Hi. Thanks for taking the follow-on. To the extent that you can comment on sort of live mic presentation, gentlemen, are there any innovations in terms of can offerings that will mean some meaningful changes to tooling, any sort of CapEx, say, not in the next couple of years, but three, four years out. From our vantage point, after we’ve moved to trim cans, we had the mini cans back five, seven years ago, there hasn’t been a ton of innovation in the can market, maybe you disagree with that, but anything that we should be mindful of, ultimately in terms of what it might mean for you in terms of tooling and CapEx, not this year, next year, but a few years down the road? Second question, it’s come up a couple of times on some of the other calls, I just want to raise it with you.
Could you update us on your view on carbon footprint, specifically PET versus aluminum especially for comparing versus recycled aluminum within beverage packaging. If you had any data on that or any thoughts that would be great. Thank you and good luck in the quarter.
Oliver Graham: Thanks, George. So I think it’s a fair comment to say that we’ve not had a huge innovation that’s led to big CapEx in the industry in recent years. And as you say, most of the innovation has been around different sizes or improved declaration or improved functionality of materials, and quite a lot of, obviously, process innovation in terms of speed of lines and therefore, cost performance. We’ve commented before that we think close ability remains a need in the industry to really get into some categories like sports drinks and other hydration categories, and we’re certainly investigating that closely. There are other innovations around the end, which could also be interesting in terms of different types of end.
And then the big driver that’s coming now is the increased sustainability of the package, and that is also driving a lot of innovation around the end because of the difficulty of using recycled content in the current alloy that we use in the end. So the so-called Uni alloy to try and get to a higher recycled percentage for the overall package. In terms of CapEx, I mean, reclose ability could involve CapEx on our side of the house. The big goal, of course, is to get it to not involve CapEx at the filler. Some of the other end innovations could involve CapEx both sides and similarly [indiscernible] depending on whether you have to up gauge and have ticker. Material could also lead to some change requirements. But none of these are very major.
So I certainly wouldn’t be modeling any major capital requirements for the industry in the next few years off the back of these. I think they’re all at the margin relative to building new lines or new can plants. But all interesting, and I think all will continue to support the cans growth in a world where the sustainability credentials are taking into new spaces and also delivering for our customers in terms of them delivering on their commitments. So — and that takes your second question about PET versus aluminum. So the main thing, I think, to note there is we’ve got a very interesting journey ahead of us in terms of decarbonization with things like Uni alloy with the decarbonization of the upstream grid with the increased recycling rates, and therefore, increased recycled content.
So we can move a long way from today in terms of decarbonization. But also, we can see in some of the studies that are done that when we get to those types of recycling rates that you see in deposit countries like 95 plus, 99 in Germany, and you get high recycled content levels, then we can certainly match any package for carbon footprint and then we’ve got plenty of room to go from there. So I think we’re going to see over the next 10, 15 years, very material progress by the can and it’s already standing in a very strong position on sustainability.
George Staphos: Thanks so much, Oli. I’ll turn it over.
Oliver Graham: Thanks, George.
Operator: And it appears that there are no further questions at this time. Mr. Graham, I will turn the conference back to you for any additional or closing remarks.
Oliver Graham: Thank you, and thanks, everybody for joining the call today. So obviously, as we said, Q1 was ahead of expectations. We’re encouraged by what we’re seeing in the market, shipment growth and the way that’s progressed into April. And with the actions that we’ve taken, I think that’s giving us the confidence to reaffirm full year guidance and also to see higher adjusted EBITDA growth for the remaining course of the year. So we look forward very much to talking to you at our Q2 results in July. Thanks very much.
Operator: This concludes today’s call. Thank you for your participation. You may now disconnect.
