Hale Holden: Great. Thank you very much.
Operator: Your next question comes from the line of Jenna Giannelli from Morgan Stanley. Your line is open.
Jenna Giannelli: Hi, good morning. Thanks for taking my question. Appreciate all the color and work you guys have done on the balance sheet. I know you said you expect leverage to be below 5x by the end of the year. I guess just maybe update and/or refresh us on the longer term outlook of where you want that to be over time, if the right cadence is still about a half turn a year, maybe we see some acceleration on that. And any shifts or thoughts on debt that you want to target within the structure as you continue to bring that leverage point down? Thank you.
John Drabik: Yes, so we’re making good progress against the debt reduction. We’re still anticipating to get to below 5x or below by the end of this fiscal year and half a turn is probably what we are targeting over time. I think that for us 4x leverage probably makes more sense. We don’t have a target per se, but I think we’ll continue to keep pushing to get leverage down from here. As far as what we’re targeting, I think we’ll continue to balance. We have been focusing on term loan, but we’ll look at term loan versus bonds. And just look at the best economic decision depending on how those are trading.
Jenna Giannelli: Great. Thanks so much. I appreciate it.
John Drabik: Thanks, Jenna.
Operator: And your last question comes from the line of William Reuter from Bank of America. Your line is open.
William Reuter: Good morning. I just have two. The first is there are very few categories in the U.S. where I think we’re seeing volume growth. Do you think that this is expansion of the number of devices that are using Batteries? It doesn’t seem like the economic environment is getting better. So I wouldn’t expect there to be a lot of restocking. And then kind of following on Jenna’s question about leverage, I guess what do you think that the bigger, longer term strategy here is in terms of you’ve been so focused on debt reduction for the last several years. Now maybe you would consider some strategic options even though in the near-term, kind of it might be debt reduction. Thanks.
Mark LaVigne: I think on that last question, we’ll continue to focus on debt reduction. As John said, I think we want to achieve the objective of getting below 5x by the end of this fiscal year. Longer term, getting the leverage levels down below to 4 and below, then it opens up more strategic capital allocation decisions where you can be — you can create optionality going forward in terms of share repurchase, continue to pay down debt or strategic acquisitions that may pop up. But for now, the focus and the disproportionate effort is going to be on paying down debt. In terms of the volume growth, again, it’s very positive. You had to work your way through a lot. You had the COVID normalization period, you then had pricing increases, you’ve also had a pretty tough macro environment seeing that volume growth globally and in the U.S. is really encouraging.
You have a very large installed base of devices already in people’s homes, between — call it, between 50% and 60% of the devices people have in their house take our Batteries, new devices and roughly the same percentage. So that’s healthy installed base. Consumers are reengaging with the category. It also shows the balance that we are executing from a promotional strategy is keeping consumers engaged in the category. You’re continuing to see consumers disproportionately migrate to the premium end of the category, the promotional strategy is working because we are able to drive volume growth going forward, we are going to drive sales growth, and we are also going to drive margin improvement. So it’s all about that calibration between those different variables that we are trying to optimize and drive the right results.
Thus far, we’ve been really successful in doing that.
William Reuter: Awesome. Right. Thank you.
Mark LaVigne: Thanks, Bill.
Operator: Thank you. And that concludes our Q&A session. I’d like to turn it back to Mark LaVigne for closing remarks.
Mark LaVigne: Thanks, everyone for joining us today and your interest in Energizer. Hope everyone has a great rest of the day.
Operator: Thank you, presenters. And ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.
