Mark Miles: Yeah. I would say, generally, our consumer business, and as Kevin mentioned earlier, the U.S. is a little stronger than Europe, and that’s consistent with our outlook and what we’re hearing from our customers and seeing from our peers. But obviously, there’s a lot of uncertainty and, we’re encouraged by some of the recent reports about inflation and promotional activity. But too early to really, I think, declare victory. So we’re — as we said, taking a relatively cautious outlook, I think, as we look forward and we’ll continue to be dynamic and nimble in our approach.
Adam Samuelson: Okay. That’s all helpful color. I appreciate it. I’ll pass the line. Thank you.
Operator: Thank you. One moment for the next question. Our next question will be coming from Michael Roxland of Truist. Your line is open.
Niccolo Piccini: Hi, guys. This is Niccolo Piccini on for Mike Roxland. Thank you for taking my questions. And Kevin, we look forward to working with you in the near future. In September, you announced that you’re evaluating alternatives for HHS. But if I recall correctly, when you acquired the business, the AVINTIV business, you had initially intended it to be one of the company’s growth drivers as you pivoted towards adult incontinence women care and diapers. What’s maybe changed that’s now not a core business or a growth driver and has put that in a position that you would consider those strategic alternatives, whatever they may be?
Kevin Kwilinski: Sure. I think, first of all, this is, obviously, a perspective from someone who wasn’t here at the time. So I’ve got an incomplete understanding. But when I think about it, from my perspective, it’s a tremendous business. It has good mid-single-digit growth over the long term. But it is a business that looks a lot more to me — if I think about my history, it looks a lot more like being in the paper business than it does being in the other packaging businesses I’ve participated at, which means that — I’m sorry, you’re pretty loud there. Thank you — which means that it is pretty capital intensive and the lumpiness of that capital requirement is much higher than the rest of the businesses that we have. So — and it’s more cyclical overall even though there is long mid-single-digit growth.
So when I think about, what are we trying to achieve here? Well, we want to have consistent earnings, consistent cash flow, we want investors to understand our story and to know when they buy our stock, what they’re getting, and what they’re invested in. So we need to make sure that when we think about our portfolio, it looks alike and we’re not confusing and we’re not getting, we’re not closing ourselves off to investors we would like to have because we have a very complicated story. So when we look at — divesting it, we’re looking at a good business that just is not a good fit for us and the long-term portfolio that we want to cultivate here.
Niccolo Piccini: Understood. I appreciate the color on that. And I guess just a quick follow-up. To the extent you can comment, I realize we’ll get more updates from you as the situation kind of unfolds. But is there anything looking for any mile markers you’re aware of in the process you can call out with the divestment or whatever alternative it may be?
Kevin Kwilinski: There isn’t anything that I would be in a position to publicly comment on. I will assure you that we are doing a tremendous amount of work on this evaluation process.
Niccolo Piccini: Understood. Thank you very much. I’ll turn it over.
Operator: Thank you. One moment for the next question. The next question will be coming from Joshua Spector of UBS. Your line is open.
Chris Perrella: Hi. Good morning, everyone. It’s Chris Perrella on for Josh. I wanted to follow up on the EM, the Engineered Materials business, where you have really shifted the product mix. Are you done resetting the product portfolio in Engineered Materials? Or is there more work coming in 2024?
Kevin Kwilinski: Yes. I think we’ve got a lot of opportunity as we think about that business. And maybe more than any other business I’ve been a bit surprised by what is actually in that group, what the businesses that make it up are, especially when I think about the way it’s named today as Engineered Materials, it’s not the name, I think, that I would put on that business long term. And I — and the issue is, we’re pushing close to 40% of the volume that we sell out of that business, is actually consumer-facing. And my guess is that most investors don’t really understand that. So when we think about how are we going to drive that business forward, we’re going to use that business to help us close the gap on our consumer-facing goal.
So we’re trying to move from 70 to 80. And I think we can do that and still deliver the kind of high-margin significant scale, growth, that we have had out of that business historically. So I think, the emphasis there will continue to be on more consumer-facing aspects and less on some of the industrial legacy.
Chris Perrella: All right. And as a follow-up, as I think about capital allocation for 2024, I think your buyback authorization is $400 million, if memory serves. How should I think about the split between debt repayment and buybacks in ’24? And then, with some of the debt coming due in ’25, any thoughts about what to do with the term loan and the approach there?
