Aaron Erter: Yeah. So SG&A, the way I look at this, and I think you’re looking at a percentage to sales. I look at this as what’s needed to support our growth initiatives. So if you think about what we’re after, it’s profitable share gain for us, long-term profitable share gain. And we’ve invested in people. We invested in marketing. I think the question is how do you know it’s working? And I would just use this year-to-date as a proof point, it is working for us. I talked about leads being more longer term. So we’ll have to wait there. But if I think about the people investment we’ve made, our investment and our customers, it’s working for us and we’ll continue to invest where we think we need to really push that profitable share gain.
Sam Seow: Okay. I appreciate the color. And then can I squeeze one more? And then you just talked about the profitable share gain. Could you maybe perhaps talk about where — I mean the PDG look quite strong there. Can you maybe talk about where that’s coming from new R&R, large or small homebuilder? Thanks.
Aaron Erter: Yeah. Sam and we’ll let just squeeze one more in here. But as far as our share gain, we talked about this before this is coming from new construction. And who’s benefiting in new construction, who’s really driving that? That’s the large builders out there. We’ve gone through a lot of color around those top 25 builders and the great relationships we have with them. But that’s really who’s driving that right now.
Sam Seow: Got it. Appreciate the color. Thanks. [indiscernible]
Aaron Erter: Sure. Thank you.
Operator: The next question comes from Rohan Gallagher with Jarden Group. Please go ahead.
Rohan Gallagher: Hi. Aaron, Rachel, James, good evening. And good morning everyone, most questions have been answered, but a quick line ratio CapEx guidance has been reduced from $550 million to $515. Any — can you sort of unpack that one please in terms of any reduced projects or more efficiencies.
Rachel Wilson: Yeah. We are on time with our biggest project here, which is, the Prattville line range. So I think we feel quite good about how we’re landing for FY 2024. We also have that color plus line and it’s also into the trial base. So we feel good that it is not necessarily that we’re not accomplishing our budgets. It’s more that we are able to trim that budget and land but to land with a slightly reduced guy here. So it’s more efficiency.
Rohan Gallagher: Fantastic. Thank you. Conscious of — Aaron conscious of the balance sheet just in terms of where you’re at — at the moment could you just cover philosophically at a high-level any conscious of inorganic growth opportunities is not your priority? What you’d be looking for in terms of principles for M&A?
Aaron Erter: Rohan, it’s a good question. What we talked about before as far as — when we think about capital allocation its organic growth first. And I think we’ve demonstrated that that is still our focus area. I would just say this from an M&A perspective. This has not been something in recent years James Hardie, has talked about. We are looking at it, right? There’s nothing in the works around M&A, but I think we would be remiss if we didn’t look at it. And it really needs to do a couple of things right? It needs to help accelerate our current strategy. Then it has to enhance the value proposition that we can bring to our customers.
Rohan Gallagher: Thanks Aaron. Thank you.
Aaron Erter: Thanks, Rohan.
Operator: The next question comes from Harry Saunders with E&P. Please go ahead.
Harry Saunders: Good evening and Rachel, thanks for taking my questions. Firstly, just wondering if you could give us any idea of what your PDG actually was, approximately for the first nine months of the year. And appreciate you sort of said that was driven by new construction but like was any of that from the R&R end-market? Thanks.
Aaron Erter: Yeah Harry, I think we answered that before. As far as — look PDG is best to give a look at from a full year standpoint. But we’re tracking really well from a PDG standpoint.
Harry Saunders: Great. Thank you. And just related to…
Aaron Erter: Yeah.
Harry Saunders: … that on PDG for FY 2025 I appreciate your sort of LTIP targets of 4% PDG. Could you just confirm whether that’s sort of an average over or three years? Or are you still sort of aiming for that 4% each year?
Aaron Erter: Yeah. Harry, that’s an average over the three years. One of the things I think that everyone has to remember when we set those targets back in call it March of last year is the environment we were in, , right? You think about a recession, climbing interest rates, very, very difficult environment, a lot of uncertainty, which even though the environment and the outlook has gotten better, there’s still a lot of uncertainty as we move forward. But those are an average over three years, Harry.
Harry Saunders: Got it. Thank you. And just wondering as well on R&R, the weakness in calendar 2024, could you just talk through what you see as the main drivers behind that market, it’s being off a couple of percent on average across your different forecasts? And perhaps how does that look in the first half next year versus the second half? Thanks.
Aaron Erter: Yeah. Look, I think that as we talk about R&R, the entire market really last year underestimated the impact that interest rates, higher interest rates would have on R&R. You had a lot of resets being deferred. Consumers lacking confidence, the list goes on and on. As I mentioned before, we really look at three or four things for the conditions for R&R to improve. One, our home price is rising. Number two, consumer sentiment, contractor sentiment and then really those big box transactions. So three out of the four have just started to improve, but we still need to see more of that I think for the R&R business to improve. And I think that’s why the projection is more of the back half of the year, Harry.
Harry Saunders: Okay. Got it. Thank you.
Aaron Erter: Thanks.
Operator: There are no further questions at this time. I’ll now hand it back to Mr. Erter for closing remarks. Please go ahead.
Aaron Erter: All right. Hey, thank you, everyone, and thank you, operator. Just again, want to thank our team across the world for making James Hardie the homeowner-focused, customer- and contractor-driven company. I appreciate everything you do, and thank you.
Operator: This concludes our conference for today. Thank you for participating. You may now disconnect.
