Lucas Beaumont: Right. Thanks. And then just secondly I just wanted to ask you about kind of the free cash flow phasing during the year. So typically sort of 1Q is sort of a use or a minor contribution but you sort of got 30% of your full year target already in the first quarter. So I mean, you called out sort of working capital as being a factor. But if you kind of just walk us through how you sort of see the progression in the moving parts here through the year that would be great. Thanks.
Jim Gray: Yes, sure. And I think that one of the things that we called out was that because of the cold weather in January, we really had to pull out of inventory more and sell out of inventory. So I do see that we’re going to be — we should be building back some of that inventory in Q2, Q3. So where traditionally, you might have seen Q2 Q3 generating a bit more cash from ops, with a smaller investment in working capital. I’m kind of seeing that just a bit of a timing shift, in Q2 Q3. And then I think more broadly for the full year, what we’re really watching is kind of the balance between how raw materials are working through, our balance sheet, our working capital in terms of accounts receivable as well as accounts payable.
And so right now, traditionally where we’ve had — so I think some nice leverage in accounts payable from different types of financing programs around the globe. With short-term rates still a bit elevated, we may not see some of our suppliers and our farmer partners taking advantage of that. So I’m just a little bit thoughtful about, what the accounts payable leverage might be year-over-year. But that’s — it’s primarily a timing thing I think between Q1, Q2, Q3.
Lucas Beaumont: Great. Thank you.
Jim Gray: Sure.
Operator: Our next question comes from the line of Heather Jones with Heather Jones Research.
Q – Heather Jones: Good morning.
Jim Zallie: Good morning, Heather.
Jim Gray: Good morning, Heather.
Q – Heather Jones: Thanks for taking the question. So I hate to belabor the South Korea question, but I just want to make sure I’m understanding this correctly. So Jim, you mentioned that South Korea in Q2 of 2023 with $80 million revenue so an adjusted base of roughly $1.99 billion. And so the flat to down low single digits, it’s off of that base of the $1.99
Jim Gray: Approximately, yes.
Q – Heather Jones: Okay. And then when you talk about OI for Q2 to be up low to mid-single digits. Is that off of the base excluding Korea? And if it is, what’s the adjusted base that we should be using?
Jim Gray: Correct. So that would be approximately I would say, that that’s probably — Korea is going to be anywhere between $5 million to $7 million OI. It kind of depends on each quarter for Korea, in terms of kind of where they were at to the prior year. So what we can do, we can follow up from that. But approximately, I think that’s about where we’re at on an OI basis.
Q – Heather Jones: Okay. And then my second question is going back to the question about the high cost carryforward inventory Textures and understand the dynamics behind that. But wondering, if you could — is that completely worked through going into Q2? Or is there some lingering effects into Q2 on that business?
Jim Zallie: Very small amount that will be worked through in quarter two. So for the most part the higher cost inventories are by now — by now through the system. You would say so, Jim?
Jim Gray: Yes.
Q – Heather Jones: Okay. Thank you. I know its late so I’ll save the rest of my answer later. Thank you so much.
Jim Zallie: Thank you.
Jim Gray: Thanks, Heather.
Operator: That concludes today’s question-and-answer session. I’d like to turn the call back to Jim Zallie for closing remarks.
Jim Zallie: All right. Well, thank you all, for joining us this morning. We look forward to seeing many of you at the upcoming BMO conference in New York on May 16, and I want to thank everyone for your continued interest in Ingredion.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
