Balaji Prasad: Just getting back to the guidance part of the question on Slide 17. As I look at the Elanco-specific factors and the guidance bridge. What I understand from this is you’re likely to get around $90 million of pricing benefit this year, assuming 2% and another $100 million to $110 million of innovation driven incremental revenue. So that gives me around of positive on positive contribution. And on the other side, balancing it seems to be competitive innovation and supply. So is there a case where both competitive innovation and supply can fully offset this $20 million benefit going with the range you provided. That’s one. And secondly, on the OpEx side, I was surprised to see FX not impacting the EBITDA bridge. Can you help us understand that and also call out the investments this year as that needs to go into supporting new launches.
Katy Grissom: Sure. Todd, do you want to start on the — just the bridge for ’23?
Todd Young: Sure. You’ve got a very good handle on how you think about the bridge. We have spent more than 2% price Yes, the innovation revenues, competitive and supply provide an offset. But again, this is all built into constant currency guidance for sales being flat to down 3%. Certainly, if certain things play out our way as we continue to execute through the year, we’ll do better than that. And that certainly what our commercial leadership is focused on as they continue to drive demand for products. And again, as Jeff mentioned, China off to the start demand getting better there, demand is getting better at retail. So again, we’re confident in the guidance. With respect to the EBITDA, as we mentioned, it’s about a $10 million to $15 million headwind on top line.
It’s just a little bit off in that — it’s a big headwind in the first half. It becomes a tailwind in the second half and that out, it’s $3 million to $5 million headwind from an EBITDA standpoint at this point. But again, that’s always some timing. So we just didn’t make a big deal of it in the walk.
Operator: Our next question comes from Brandon Vazquez from William Blair. Please go ahead. Your line is open.
Brandon Vazquez: I’ll ask Tom as well. The first is just — there’s been a couple of mentions of inventory levels. I think it was in the U.S. in Q4. Curious if kind of like reduced inventory levels are expected to continue in ’23, and if that’s already baked into the guidance? And the second is just on the relaunch of Advantage and Advantix, maybe these more value plays. Can you talk about, are those kind of margin accretive at launch? Does that need to sale as well as you were talking about before? And can that help through the year?
Todd Young: Sure. Thanks, Brandon. So on inventory levels and how we’re seeing those again, there was a step down in Q4 from the farm animal side. We’ve not assumed a rebuild there or rather just that they would continue at that point. So it’s not a headwind in ’23 in theory from a growth perspective, to be a tailwind if we don’t have that headwind again in the back half, that’s part of back half acceleration. Similarly, on retail inventories, for the OTC pet products, again, retailers did take that down at the end of the year, $10 million to $15 million Overall, it will be volatile over the course of the year. We’ve not assumed an increase of that. So again, assuming it stays at this level, and we think it’s about at a level they need in order to serve the customers well.
then again, that would be part of the growth in the back half as we wouldn’t have that headwind making through an easier comp. With respect to the relaunch products, again, very efficient scale at our keel manufacturing facility. And so yes, even at the lower price point for the consumer, they’re accretive to overall gross margins of Elanco.
