Christophe Beck: Great question, Manav. Sorry, they’re related, obviously. But the first one, pricing dynamics. If we think about our pricing, so going up, retention has remained very stable, customer retention and at the same time, saw volume accelerating. So it’s basically showing that our balance of pricing and volume acceleration is going quite well. And I’m keeping a very close eye on that because we’re keeping customers for life in our company and I want to make absolutely sure we do that the right way for our customers and for our company. So bottom line, I like the pricing that we’ve had so far, when I look at what’s going to happen in the next few quarters. So in Q4, the carryover from last year by definition is going to get close to zero, obviously, since it’s going to be annualizing over the 12 months.
New pricing is quite good actually. So, I’m especially pleased with the new pricing we have, which we will have, obviously, in Q4. And in 2024, it’s a bit early to go too much in detail, but we’re going to be pleased with the pricing that we have while we keep accelerating as well the volumes. So really keeping both in a very good place. Now to your question on the net new business, as you know, we’re not reporting the dollar value of the growth, but we are really reaching record levels on a quarterly and annual basis as well of new business. Our team is 80% focused on new business. It’s where we’re good at, what we like doing, as mentioned before. And those good results ultimately are compensating for the softening of the demand globally out there from all our customers.
So, if our volume is accelerating, it’s all related to our new business.
Operator: The next question is from the line of Shlomo Rosenbaum with Stifel.
Shlomo Rosenbaum: Hey Christophe, I want to get back to a question that was asked earlier in terms of the volume. It sounds like after three quarters of negative volumes, you’re starting to get into the positive territory. Could you just go into some of the kind of standout categories over there? What volumes are increasing and which volumes are decreasing? I know you mentioned a little bit about geography, but maybe you could talk a little bit just by like business unit, what’s going on in various areas of Industrial? Obviously, Paper is down. But what are the standout areas where you might have accelerating volumes versus the ones which are shrinking? And how we should think of that going into next year with some of the softening end markets?
Christophe Beck: Yes. So to give you a simple answer, so the ones that are on the soft side, Paper, you mentioned it and Europe is the second one. So those are the two. Everything else is trending in either positive direction or improved direction, if they were on the negative side. I’m especially pleased with the I&S, Institutional & Specialty improvements and Water is going to keep improving as well. So those two key businesses are going to be good in the quarters to come, at least with what we’re seeing as well right now. So, we have passed elimination as well, which is always a bit of a different volume play, as we know. That’s doing exceptionally well. We know that competition has a lot to do with themselves. By the way, it’s providing us an opening for us to gain share as well.
And our team is doing an excellent job in pest elimination, where we see growth, really steady, strong and margins as well at the same time keeping improving. So overall, our business in a very healthy place with a few places where we need to work on, as mentioned, Europe and Paper. But to the point of Europe, I’d like to mention as well that margin improvement has been great. So volume challenged in Europe, as we know, but okay, not great. And when I think about our operating income it almost doubled in Europe in the third quarter. So the team has done some really good work.
Operator: Our next question is from the line of Andy Wittmann with Robert W. Baird.
Andy Wittmann: I guess maybe, Scott, probably for you, when I was just looking at the adjustments to the results, I noticed that there was $26 million of restructuring and the total exclusions were $0.13 for the quarter. You talked about last quarter expectation of 5. And actually, the guidance for fourth quarter is pretax around $30 million by my calculations or $0.09. I guess, could you just talk about what the restructuring actions were in the quarter and the quarter ahead? Maybe which segments, geographies? And are these — is it another restructuring program that you’ve taken in the past forming here, or can you just maybe talk about some of the operational effects of what you’ve achieved and are trying to achieve?
Scott Kirkland: Yes, certainly, Andy, happy to do that. Thanks for the question. Yes. So if we look at Q3, the special charges, restructuring was higher than we had guided to. But that’s really due to the timing of the phasing of our combined savings program that we had announced earlier this year, that’s really focused your question on where are we focused on it. This is really targeted around Institutional & Healthcare and as well as Europe, it started in the end of last year and then we added on to it earlier this year. And that’s what really drove it but really around the timing. But still expected, as I think I’ve talked about in previous calls that about of that program, about 90% of those costs are going to be done by the end of next year, okay?
And so there will be a little bit of a tail going to 2024. But really then if you look at that, as Christophe talked before, we’re seeing the benefits in Healthcare from the program there, but we’re also seeing great improvement in the Institutional businesses and that’s where it was really focused. And then, as we talked about at the end of last year, the actions taken against Europe and Christophe mentioned that we’re seeing really great margin improvement in Europe as well. So, I think the actions that we are taking are having the benefits we expected.
Christophe Beck: Let me add a few comments. So you totally support what Scott just said. Obviously, I’m really happy that most of the combined programs are coming to a close by the end of this year, which was the plan, so delivered as expected as well. At the same time, we know that digital technology, artificial intelligence will open some new productivity opportunities for us in the future. There’s nothing clear in our plans right now, but we will keep looking at that. And if there is an opportunity to improve significantly our productivity through technology in the quarters and years to come, we will certainly capture them and discuss that with you.
Operator: Our next question is from the line of Steve Byrne with Bank of America.
Steve Byrne: Christophe, I’d like to hear your view or maybe ranking among your four key product areas: Water, Hygiene, Energy and Pest with respect to potential share gains. And would you expect your SG&A to increase over time commensurate with revenue growth, or do you see a pathway to perhaps reduce that 47,000 headcount in a way that either utilize your digital approach or whatever to be more efficient and help you reach that 20% operating margin goal?
