Josh Spector: Yes. Hi, good morning. I wanted to ask on your expectations of volume cadence. Clearly, very strong first quarter, so congrats on that, but I think some of the comps on a year-over-year basis actually get a bit easier. So is there something you call out that you would say is a headwind we should consider, or would you characterize your view as just conservatism? Thanks.
Erik Fyrwald: Thanks, Josh. Let me start and then Glenn can give you more details, but as I see it, still fairly new coming into the company, clearly CPG company volumes are still soft in the US and the EU, and so we can’t expect a whole lot of market tailwind growth. I do think we’ve seen the end of most of the destocking outside of Pharma Solutions, and Glenn alluded to the Pharma Solutions destocking, both a market destocking and our change in channel strategy, but bottom line is we can’t expect a lot of growth from the marketplace, although there are some emerging markets that we’re going after that are seeing very attractive volume growth, but overall, our focus has to be growth through bringing leading innovation and winning business with customers.
And I’ve heard a lot already about commercial projects that we’re winning, but we’re also going to increase the focus and understanding the projects that we didn’t win. Why didn’t we win them? What does it take for us to be even more successful with our customers and win even more projects and bring that leading innovation so that customers are growing their market share profitably and we’re growing with them, but Glenn.
Glenn Richter: Thanks, Eric. And Josh, I think, as Eric mentioned, until we see a strengthening in the consumer environment, which has yet to appear, and until we have a few more months underneath our bill, it’s sort of hard for us to be sort of incredibly optimistic on the second half. As a reference point, the first half volumes of circa 4% to 5%, and the second half basically 1% to 2%. As a reminder, the first half of last year, because of the aggressive destocking, was down 9% and the second half down 5%. So a little bit is the lapping as well as we sort of think about providing guidance. But I think the end market, as Eric said, we need to see greater strength there before we’re sort of more confident in higher volume growth in the second half.
Operator: Our next question comes from the line of Mike Sison with Wells Fargo. Mike, your line is now open.
Mike Sison: Hey, good morning, and really nice start to the year. When I think about the first quarter EBITDA run rate and EBITDA margins, really good improvement at 20%, our guidance would sort of imply that those levels fall sequentially. So anyway, sort of one time positives during the first quarter that wouldn’t reoccur and just curious, if demand and volume levels remain here, why wouldn’t EBITDA margins stay sort of in this 20% range for the rest of the year and congrats on retirement, Glenn.
Glenn Richter: Thank you, Mike. I might actually come visit you in Cleveland when I retire, by the way. So, good question. So 20% for Q1. So the implied balance of year is around 18.5%. That 150 basis points have changed. Half of that’s related to volume and mix, inclusive of LMC. So, LMC, you take out about $12 million per quarter on about $25 million of revenue. So it’s a relatively high margin. So everything normalized that gets you from the $20 million down to basically $19.25 million. The residual 75 basis points really is a little bit more net price to cost realization in Q1 versus the forecasts, and then just some timing of expenses, but to answer your direct question, if volumes were to maintain, then we should be somewhere in the 19%, probably 19% plus range for the balance of the year.
Operator: Our next question comes from the line of Patrick Cunningham with Citi. Patrick, your line is now open.
Eric Zhang: Hi, good morning. This is Eric Zhang on for Patrick. What are your expectations for price cost for the full year? The price guide seems to be a bit, seems to be a small net positive, if you net out FX. Are there any areas where you’re getting structural pricing or is this just less give back than you expected?
Glenn Richter: Yes, Eric, you’re right. The full year, we’re expecting a small net positive, as I mentioned, a little more bias towards Q1 than the balance of the year. Our pricing actions, which were largely give backs this year, we’re highly focused in the functional ingredient space. We are tracking well against the expectations that we set for the year. We do believe that the improved performance in the business is in part related to these pricing actions on top of the other actions and we don’t see sort of any additional kind of pricing for the balance year at this point in time. And then in general, if we look at sort of the inflationary environment for the balance of the year, it’s pretty stable. I’d say commodities are flattish to maybe, maybe a tad up.
Generally energy is trending down, particularly in Europe, and logistics is trending slightly up, particularly ocean freight, given what’s happening in the Red Sea, but you know, generally stability and as we mentioned, a little more positive net price in the first quarter than the balance of year. Thank you, Eric.
Operator: Thank you. Our next question comes from the line of David Begleiter with Deutsche Bank. David, your line is now open.
David Begleiter: Thank you. Eric, does the improvement in functional ingredients market turn in this business and looking forward, can the entirety of this business return to prior levels of sales and earnings? Or is there some portion of business that will not do to low cost Asian competition? Thank you.
Erik Fyrwald: Thanks for the question, David, and glad to be back with you again after some years. Absolutely. It marks the beginning of improvement in the functional ingredients business and very pleased to see that after a long tough spell and what I would say is that we are putting more focus on the functional ingredients business and I’m very pleased to see the start of what the team are working really hard to make a sustained turnaround. And in addition to better execution, which is happening, we are doing a strategy refresh and looking at all the product families and our systems approach across the functional ingredients business and we are focused very much right now on delivering a strong improvement in 2024, but also what it takes to make sure that that improvement continues into 2025, starting with the second quarter ’24, then the third quarter, but the full year this year, but doing — making sure that we’re doing the right things to strengthen for ’25 and beyond and you’ll hear more about that in the coming quarters.
