Daniel Fisher: Yeah. I mean, Adam, I do think that we have quite a bit going on in Argentina. You saw the volume sawing off. I think as we think about the business and as we do various scenario planning, we continue to contemplate how things are looking with the fiscal policies and the like. But if you’ve looked at that business historically, it has been one of our best performing regions. And we continue to monitor obviously and derisk where we’re possible. But as of today, our belief is that that market and we want to make sure that — we support the customers there and our view on that business being intact long-term remain.
Howard Yu: Yeah. I would add just a couple of comments. Obviously, when you’re in more volatile emerging markets, quote unquote countries, you get paid really well to be there. So, when that volume is off, your margins will dissipate just from a country mix standpoint. That’s the environment we’re in probably versus where you saw us a couple years ago and specific to Argentina. So that volume matters. And as that comes back, we’ll inflect up and we’ll leverage up and you should see that improvement. Brazil has been very resilient here. The second half, we saw that inflect. We continue to see a strong January and our folks are calling for a decent and improved Q1. And that will help. Things that matter in Brazil then are going to show up in terms of product mix.
The way we — the way we sell our can and ends to our major customers have pretty big tax swings and impacts there. So that will matter. But in terms of the full year, quarter-to-quarter, maybe a little choppy, but the full year will continue to deflect, see a more profitable business there and see mid to single digit growth. Chile is off to a decent start. Paraguay is off to a decent start. So, I’m feeling good about South America. Argentina is meaningful for us though in terms of the question that you posed. So, we just have to — we’re holding to kind of flattish earnings year-over-year. And so, as we get growth from other areas, the margins won’t look, I think on a mixed basis as good, but the earnings will flow through consistent with those regions and what those customers have delivered historically.
Adam Samuelson: Okay. Now that’s really helpful. And then if I just ask a follow-up on the other kind of non-reportable businesses, the aerosol and the cups business. Aerosol business had a good fourth quarter. How do we think about that line item offsetting corporate moving into 2024?
Howard Yu: Yeah. We saw a — I think we saw a year-over-year 40% improvement in operating earnings for the aerosol business. We’re going to see double-digit growth in earnings next year. The team has done a phenomenal job turning that business around and it’s inflecting the growth and a lot of that has to do with this reuse category that’s emerging in places like Europe on the personal care spot, even the beverage spot side that we’re taking advantage of and very disciplined contract management in terms of inflation and things of that nature. So that business will have doubled in earnings over about a 36-month period. We continue to see nice growth there. Cups will be incrementally better. We’ve seen foodservice grow. Retail has come off.
It was a difficult retail year, but we should see continued tail — tailwind in terms food is really the big opportunity set for cups, but negligible margin improvement, maybe taken the terms of 5 million to 10 million better year-over-year there.
Adam Samuelson: Okay. That’s all really helpful color. I’ll pass it on. Thanks.
Daniel Fisher: Thanks.
Operator: Our next question comes from the line of Mike Roxland with Truist. Please proceed with your question.
Mike Roxland: Thanks, Dan, Howard and management [ph] for taking my questions.
Daniel Fisher: Sure.
Mike Roxland: A lot of ground cover today. And just wanted to follow up quickly on the business development efforts you’re pursuing. You called it out in the press release. Any reason why you felt the need to call it out? Is this something that you’ve recently accelerated?
Daniel Fisher: Yes. We are making a more conscious effort to push innovation and it’s being received. It’s a catch 2022, right? Somebody has to be asking for it as well. And we’re seeing more of that. I think I made reference to this in the last earnings call as well. It’s going to take innovation and it’s going to take differentiation for our customers. It’s not just going to be pricing as they move forward. And so, in order to grow, they’re going to have to get back to what they’ve historically done. New product launches, new brand launches, new innovations, all of that’s going to matter. And that is something that we do really well. And so, we’re stepping into those opportunities and that’s why we called it out. And I suspect over the back half of this year and in 2025, you’ll start to see some things show up on shelves that we’re encouraged about. I’ll leave it there.
Mike Roxland: Got it. And does that require any headcount?
Daniel Fisher: No. It doesn’t require headcount. I think we have — what we need. You’ve always got to look at your business and identify whether you have the right skill mix, whether you’re right — and I think those are the things that we’re doing. And candidly, we’ll talk about this more at Investor Day in June, but we’re on the verge of being exclusively an aluminum packaging company. And we have a couple advantages, right? We are great at innovation, and we can sell sustainability at scale. And those two things need appropriate resources behind them. But that does not mean we’re adding cost. In fact, we should be able to do this in a much more efficient manner than we have historically.
Mike Roxland: Got it. And one quick follow-up, Dan. Just in terms of the retailers resetting shelf space, any early signs of how that’s going to play out and when you can start — maybe using some of that underutilized capacity that you have?
Daniel Fisher: We’re definitely growing with folks that are taking shelf space and share. It is inflecting in a couple of plants directly located to those customers. I wouldn’t say it’s meaningful across the system and it will continue to grow. But you really won’t see those shelf space impacts until peak season. That’s where it really manifests. And so, Q2 and Q3 will be something that could kind of alter hopefully positively our outlook as we’re giving it today.
Mike Roxland: Got it. Thanks very much and good luck in 2024.
Daniel Fisher: Thank you.
Operator: Our next question comes from the line of Gabe Hajde with Wells Fargo. Please proceed with your question.
Gabe Hajde: Dan, Howard, good morning.
Daniel Fisher: Hi, Gabe.
Howard Yu: Hi, Gabe.
Gabe Hajde: Somewhat of a fact check here, Dan. You mentioned growth would have been flattish, I guess on the volume side, had it not been for the brand disruption. Is that directionally then about 3 billion units that we should be thinking about?
Daniel Fisher: That’s exactly it. I mean 3 billion and somewhere in that $8,200 million impact.
Gabe Hajde: Okay. Thank you for that. And then I feel like we’ve hit each segment sort of in different answers to questions. But I think I heard you in response to two questions ago. Segment earnings in South America, flattish on the full year, despite the mid single digit earnings growth — or excuse me — volume growth that you’re talking about. And then in Bev, I guess North Central America, we have a $30 million bad guy from the energy contract. Let’s call it 10 to 15 of a good guy for the unwinding of AR factoring, depending on timing. And then flattish volume growth. You mentioned the PPI should be positive. And I think there’s a mid-year reset on your prior, I don’t know, $180 million or so that was contracted. So, maybe a little bit more prescriptive there. And then low single digit growth in Europe translating into some operating earnings improvement at the segment level in Europe.
