Celeste Mastin: Yes. So as you saw, our gross margin expanded in line with our expectations, about 190 basis points. From a raw material perspective, in Q1, we did see some easing versus Q4. Of the 4,000 items we monitor a significant number of those were still up or flat. And the vast €“ a significant number were still up. And when you look at prior year, almost all of them are still up versus prior year. Now we’re starting to see some plateauing if you look at March versus February. And the teams have done really a great job managing price. They have got a lot of tools, dedicated resources to help them, confident raw materials start to move in our direction, although that has been slow. And we remain very confident in achieving the $130 million to $160 million benefit that I shared with you last quarter.
John Corkrean: And Ghansham maybe I’ll just add €“ yes, I’ll just add to that a little bit because you had asked about the €“ what would it take to deliver the $130 million to $170 million and €“ or $130 million to $160 million and how difficult additional pricing will be? I think the majority of the pricing contribution will be the carryover we had from 2022, and you saw in the first quarter that, that number delivered about $70 million of year-on-year P&L benefit. Now raw materials were actually still up year-on-year in Q1. But we would expect over the rest of this year, the majority of the benefit will come from the carryover pricing. And that as raws ease that year-on-year negative impact will reverse. So I think that’s what gives us confidence as most of the actions, if not all the actions we need from a pricing standpoint, we’ve already executed, and we are seeing raw materials start to ease.
Ghansham Panjabi: Great. Thank you.
Celeste Mastin: I think on top of that, we should speak to the topic of innovation, right? Because if you €“ if we’re really talking about pricing power, a lot of pricing power that we derived is based on being a valuable contributor to our customers and enabling them to achieve their objectives. And we are being rewarded in the market for that, and we will continue to be.
Ghansham Panjabi: Okay, thank you.
Operator: Your next question comes from the line of Vincent Anderson from Stifel. Your line is open.
Vincent Anderson: Yes. Thanks, and good morning, everyone.
Celeste Mastin: Hi, Vincent.
Vincent Anderson: Hi, so for you, Celeste, if a large majority of your restructuring savings are going to be in Construction Adhesives, I think that would amount to comfortably north of a 30% increase in run rate EBITDA. So I guess, just simply, how are you getting there?
Celeste Mastin: Yes. So a couple of ways. Now when we introduced the restructuring plan, it was largely driven by the need to restructure our CA business and about 40% of the benefits of the plan will be obvious in that business. But that’s not the only focus on the restructuring. We also felt like we needed to adjust to recessionary volumes in our other business units. So as a consequence of the activity, we are closing one plant in North America for our construction business, and we’re also exiting our facility in Argentina. So of the $30 million to $35 million of restructuring benefits, about two-thirds of those will be related to cost of sales and the remainder will be associated with SG&A.
Vincent Anderson: Okay. That’s helpful. And you kind of answered the next question already. So you’re rationalizing one asset in North America, how do you feel about your capacity in the U.S. overall, especially with kind of the pace of new business wins? And is any part of this restructuring may be in preparation for maybe further investment in your North American footprint?
Celeste Mastin: Yes, so we fundamentally believe it’s important to have facilities close to our customers. Now we also have been reassessing our overall manufacturing network. We’re looking at capacity by plant, by line, by technology to really determine what is the right amount of capacity for us to have in place not just now, but 5 years from now. And I do anticipate there is going to be more moving pieces to that as we continue to dig in further.
Vincent Anderson: Alright. I guess, we will stay tuned on that. And then just one more quick one, well, maybe quick. Going back to your dollar margin expansion. I mean a lot of the confidence in that, you spoke to it already, but in prior conversations, was your ability to maintain a similar margin on a lower cost alternative to your customers. What has been the cadence so far with customers this year throughout this destocking in terms of €“ are any of them actually trading down to those lower-cost products or are they just kind of comfortable accepting the price increases knowing that H.B. Fuller can supply them a lower cost alternative if they choose to switch down the road?
Celeste Mastin: We’re early on in that journey, I believe. We have introduced some lower cost alternatives, certainly to some customers where we’re needed. But the majority of our R&D activity right now is focused on innovation and bringing new technology. And that’s really more where I’m seeing €“ where we’re seeing the wins. We’ve introduced new products in our automotive market. For example, we just introduced some new interior trim applications for ambient lighting, liftgate applications that are going to be introduced on six new vehicle models over the next 2 years from a notable €“ by a notable OEM. And so our teams are prepared and have products using alternate raw materials available and lower cost raw materials available, but it has not been as much of a pull from customers as some of these exciting new products that we have been able to introduce to help them further their business and establish differentiation themselves during such a challenging time.
Vincent Anderson: Excellent. Thank you, I will turn it over.
Operator: Your next question comes from the line of David Begleiter from Deutsche. Your line is open.
David Begleiter: Thank you. Celeste, can you discuss March trends in both HHC and EA as well as any visibility you have on April order books?
