Larry Hilsheimer: Indirect.
Ole Rosgaard: Indirect, yes. And obviously, you have really coming out on December 16, and then we’ll see what happens after that.
George Staphos: Larry, you said indirect destocking. So you meant downstream and how that flows back to your business? Would that be a clarification —
Larry Hilsheimer: That’s the biggest impact —
Ole Rosgaard: Our customers.
George Staphos: Yes. Got it. I’ll turn it over. Thank you.
Operator: Thank you. One moment for our next question. Our next question comes from Aadit Shrestha with Stifel. Your line is now open.
Aadit Shrestha: Hi, good morning. Thanks for taking my call today and my questions. Just coming in for Michael Hoffman. He couldn’t make it. My first question is just regarding FX. And do you have anything built in for that within your guidance? And obviously, it was a big headwind this year, but I think the rates are sort of a little bit better now. So how do you see that going forward?
Larry Hilsheimer: Yes. We — so we factor it in based on futures and currency every year in our budget process. And when I end up — when we end up giving quarterly guidance, we do factor in some range of expectancies on currency. And the — so what — and normally, if everything doesn’t go against you, it sort of goes within the range and it ends up being a material item for us. Clearly, for this year, two things happened to us. One is we used to have a good natural hedge with our FPS business. And when we sold that, we lost some of that natural hedge, and so we did more financial hedging. But we saw an overall impact for the year, roughly $9 million, which is more than what we would have had in the past. Going forward, next year, based on what we see in the currency markets, we have, on our revenue side, about $160 million to $170 million headwind next year is what we estimate right now from currency.
But we do hedge decent amounts of the bottom line impact should be immaterial.
Unidentified Analyst: Okay. Great. Thank you. And as a follow-up, just regarding the free cash flow guidance. I think you have working capital to be a source of cash of around $70 million. And I think you had a pretty sizable $90 million source to 4Q ’22. How much more working capital improvements can you drive in the near term, basically? Is this all sort of captured within the next year? Or do you see incremental working capital benefit at 2023?
Larry Hilsheimer: Yes, we actually believe that we have more working capital opportunities. We brought in a very seasoned and knowledgeable supply chain leader last year. And she has spent a good part of this year really diving into our operations, and we have a glide path that we’re going on, on actions to execute that we do believe provides us the opportunity to drive even better improvement in our working capital. I mean our team did a phenomenal job in the fourth quarter, as we said, executing on what we’ve said to people before, when demand decelerates, we are able to generate cash. And they did an excellent job. But we do think there’s upside. We think we’ll have a benefit somewhere $50 million to $90 million from working capital in the coming year.
Unidentified Analyst: Great. Thanks a lot for taking my questions.
Operator: Thank you. One moment for our next question. Our next question comes from Adam Joseph with KeyBanc. Your line is now open.
Adam Josephson: Larry, Ole, thanks very much for taking my follow-up. Just to follow up on George’s question about exit rates, volume trends. Can you talk about, relative to down, call it, 8% in the October quarter, what volume was down by month and then what you saw in November?
Larry Hilsheimer: Now I can give you some — so we’ll look at it on units per production day, Adam. And so if I go to CIT, we want August, we were 212,000 a month. September was 201,000. October was actually 204,000, and then November was about 194,000.
Adam Josephson: Okay.
Larry Hilsheimer: So steel is the biggest one across the platform, but the others are similar trend lines.
Adam Josephson: And in PPS, I just want — just trying to get a sense of what the exit rate was. In other words, if November was down —
Larry Hilsheimer: You’re seeing trend lines go down for sure on — across all of our businesses. And so — but much less so in our – in the PPS operation. I mean we did see some deterioration in November more in that business. So put it in a downtime perspective, Adam, we had 30,000 tons downtime in November, about half of that containerboard.
Adam Josephson: And you had taken how much downtime previously, Larry, just as a reminder?
Larry Hilsheimer: 26,000.
Ole Rosgaard: In Q3.
