We have been open about how we were getting those approvals, a dozen of them did happen in the last six months, and as such, they are now launching, they were building stock, we are producing commercial volumes. So that’s the other dynamic. There is the specific product for which we have resolved the supply chain disruption and now we do have primary materials to be able to deliver that important product, and as always happens in this case, is after one year of suspension, not only you serve the end market demand, but you also doubled down on inventory deals. So there is an inflated demand in the short-term. And finally, we are pleased with the way we are winning business in our early-stage there as well. So across the Board, I believe that PCH is posed for a good year.
When you look at the year over the horizon of the last two years, it’s really where it needs to be, mid-to-single digits, clearly because last year was kind of flat. This year looks a little bit higher, but this business is performing now as we expect it to perform.
Rachel Vatnsdal: Great. That was really helpful. And then my follow-up, I just want to ask about conversations that you have been having with customers. So given some of the recent challenges, can you give us any color on what your win rates have been with new customers in recent months and then can you discuss, has there been any discussions around cancellations or request for concessions from customers given some of those challenges? Thank you.
Alessandro Maselli: Sure. Look, as you can — I have been always pointing out that the data set of our customers, especially our existing customers in terms of evaluating the current performance is a little bit wider. So — and as we shared in the script, just to point one example or one side, that you have a CRL, which makes to the news and you have an inspection ending up with the Form 483 [ph] observations in Anagni that does it make it to the news. And we are sharing now that today just for the very purpose of providing a little bit of a more balanced view, which is up to get from the external world, but surely is one that our customers get real time. So when you think about some of those challenges, one, the perspective is a little bit different and the set of information available is already different.
According to our quality agreements, we do share with our customers all our regulatory outcomes, include both the ones that are impacting their products and the one that are not impacting the products to provide a perspective on the overall compliance profile of the company. And with regards to the other news, of course, me and the rest of the management team are on the front line all the time and providing perspective of the news that have been coming up in the recent months, including the ones that are coming up today and we are going to be — is always transparent providing perspective but also reassuring customers that Catalent has been here for decades and will be here for decades to come.
Operator: Thank you. With our last question comes from Tim Daley from Wells Fargo. Tim, your line is now open.
Tim Daley: Great. Thank you. So, first off, I just wanted to follow up on an earlier answer to the last of today’s many GLP-1 questions. So, Alessandro, I think, you said that, all your sterile facilities are involved in GLP-1 projects in some way. So could you just update us on the global count of sterile fill finish lines currently offering commercial scale and what percent of those have prefilled syringe and/or cartridge capacity?
Alessandro Maselli: So, look, I would tell you that, at the moment, we have a pretty sizable capacity in sterile fill and finish. I believe at the moment, I would say that, probably, close to 40% of our capacity in prefilled syringes and we are rapidly increasing that. So I believe that our capacity will become skewed towards prefilled syringes in calendar 2024, and what you should think about is that most of our sterile fill and finish volumes will come from prefilled syringes as we go forward. I just would like to point you out also to the fact that our service does not finish with the filling operations, but we provide also packaging to our customers, we provide auto-injector assembly to our customers. So there are a lot of capacities, which seems to be ancillaries, but are pretty relevant in the overall economics of these franchises, specifically also on the one that you did mention.
So we have a pretty large footprint, we are pleased with this coming online, what will be coming online and we believe that with our footprint, we are going to be able to play a major role in these therapeutic areas.
Tim Daley: Got it. No. That’s really helpful. And then my second one here is on free cash flow generation efforts. So, Matti, you called out the inventory balance as the second priority in working capital opportunities behind accounts receivables. So appreciate muted capacity utilization is likely inflating the balance here. But given supply chain and supplier lead times have normalized, why haven’t we seen inventories come down already or why is that not higher in the packing order in terms of working capital initiatives?
Matti Masanovich: Well, I mean, I think, right now I wouldn’t say there, maybe it was my phrasing of the ordering, but it is high on the pool. I think from an ease of getting the cash out, I think, in receivables, we have shipped the product. We have an outstanding receivable. They have got to go collect it. So it’s a lot easier to go and get it just as it comes back, comes in quicker. Inventory has to burn it off. You have to utilize it and burn it off and then change your ordering patterns and look at the SIOP process to really get at what I will call the DIOs and the underlying metric of DIOs and bring it down and so I do think there’s a little bit more work to do from an inventory perspective. I do think the company just really hadn’t focused on it to-date as much as they should have and I think when you sit here and look at the inventory balance, I think, it’s a bit loaded, I do think we have an opportunity to take it down, like I said, burning of those inventory balances and bring it down to a more normalized number where it’s sustainable.
