And so we’re on track with those and those program — that program is having a significant impact.
Christophe Beck: Well said, Scott. In general, we want to get transformation done the old-fashioned organic way. It’s only in exceptional opportunities that we go the restructuring way. When it helps us move quicker, which means making the business more competitive to gain share and improve our margins in order to return more to shareholders. And to Scott’s point you look at what we’ve done in Europe has been an unbelievable journey. The fact that that business has been doing so well in 2023, reaching the highest level of margin, as well in some of the toughest of times, as well is speaking very well on how we’re doing that. Think about Institutional, we had to adjust to a new reality business is in the best place it’s ever been.
And then Healthcare, early on that journey much smaller business obviously, but we will get to the right place as well over time. And the restructuring investment, helped us in all three cases to move much faster and to get returns quicker as well into the P&L. So when I look back, I like what’s been done and especially been done as well. So, in budget, and in time, as we had promised as well. So overall, good stuff for the company our customers and our shareholders.
Operator: Thank you. Our next question is from the line of Vincent Andrews with Morgan Stanley. Please proceed with your question.
Vincent Andrews: Thank you. Wondering if there’s been some change in your procurement strategy, whether it’s been changing in some of your large suppliers or changing the terms or duration of the contracts that you have? I’m just really trying to bridge. 4Q came in a bit better than expected but 1H is obviously, a lot better than what we were talking about three months ago. So I’m just trying to understand if something has meaningfully changed in what you’re doing or if it is just conservatism? Or what drives us from there to here particularly because – it sounds like a lot of folks think the back half raw guide is conservative. I would probably echo that. So just trying to understand what might change over the next quarter or two that could allow that second half to come in better than what you’re guiding to right now?
Christophe Beck: Well a few points in your question here. So when I think about our procurement team, we have an unbelievable team around the world. We have a new Chief Procurement Officer, who joined us a year ago from a world-class organization that been very respected in the procurement world. And yes, he has brought new capabilities, new tools, new approaches, new ways as well of managing relationships with suppliers. So yes, quite a bit of a transformation. And I think we’re really reaching world-class levels that new leadership and that new team that we have on procurement. So I really like what I see on the procurement side. So if there’s one team that can leverage as much as we can in terms of capturing the benefits of the easing of DPC inflation.
Well that’s the right team. So when we talk about what you’ve heard from Scott a little bit early on, our cost DPC costs are still 35% up versus what they used to be pre inflation. Well, I see it as a huge opportunity obviously for our company and for our shareholders because most of it will recoup at some point. The timing is not in our hands. Our team is trying to get it as quickly as we can. So we will get it. And at the same time I want to make absolutely sure that we get our value pricing done the right way. As you know, our margins are not at the high watermark, the 44% where it used to be we will get back to these 44% because yes, DPC is going to get back close to where it used to be. When? I don’t know. It might take a few years to get there.
But on the price side with our customers, we want to do it exactly the right way. That’s a net benefit for our customers as well. They get more pricing. But when you think about the value we create for them when it far outweighs the pricing that they’re paying for us, which is one of the key reasons why our margins are improving so nicely and why are we keeping our customers and building even new relationship as we move forward. So overall, a good story for our customers, our company and our shareholders.
Operator: Thank you. At this time we have reached the end of the question-and-answer session. I’ll now hand the floor back to Mr. Hedberg for closing remarks.
Andy Hedberg: Thank you. That wraps up our fourth quarter conference call. This conference call and the associated discussion slides will be available for replay on our website. Thank you for your time and participation and hope everyone has a great rest of your day.
Operator: This will conclude today’s conference. Thank you for your participation. You may now disconnect your lines at this time and have a wonderful day.
