Steve Powers: Yes. Hey. Thanks. Good morning. I guess I just want to go back to — I think it was David Palmer’s question on the second half gross margin I didn’t — maybe it is me, I just didn’t quite follow the answer. I do think the math suggests essentially no gross margin expansion in the back half, but you sound confident about the momentum you’ve got going into the back half. So, I just wanted to revisit that, if I could. And then a different topic entirely, but just on Nigeria, it sounded like from the way you described it that you didn’t anticipate taking any incremental pricing from here post-devaluation that you’ve kind of been proactive on. I just wanted to play that back and talk through what the dynamics are and just kind of validate whether — what the pricing outlook is in the context of devaluation going forward?
Steve Cahillane: Yes, I’ll start with the Africa topline and then turn it to Amit to build on that and then address your gross margin question. I’d say the African team has really shown their skill, their savvy, their experience because we mentioned in the prepared remarks, we’ve seen the devaluation of the de facto basis and have been transacting pretty much at the rate that it was the value to or close to it. And so that’s why you see the level of pricing that we’ve been able to take, which really protects our margins going forward, and its underlying the performance in Africa. We’ll continue to watch the currency. It’s been, I think, the government, I give great credit for doing the things that are necessary, but very, very tough for the long-term of that economy in that country.
And we’ll continue to watch what’s really happening with the currency as we always have and think about if it continues to work towards a continued evaluation, we’ll price accordingly. And we price constantly to make sure that we’re keeping track of the underlying currency as we see it. And so with that, I’ll turn it back over to Amit then.
Amit Banati: Yeah. Thanks, Steve. So I think the devaluation that we are seeing right now is more of a catch-up in the official rate at which we translate, I think operationally, like Steve mentioned, we’ve been operating against the de facto devaluation that’s happened. And you can see that in our pricing. And you can see that in our NSV growth, which has been north of 20% for the last few quarters. I think from a translation standpoint, Nigeria is about 10% of our sales. So with the devaluation, it’s about a 4% impact on our overall NSV, which will be split between the two years, 2% this year and 2% next year. This has been incorporated into our ForEx guidance. So the guidance that I gave based on today’s rates, of course, of around a 3% impact on NSV that incorporates the Naira devaluation.
I’d also say that the impact on OP and EPS is less than 1%, and that’s also been incorporated into the 1% negative impact of currency on the EPS. So that’s Nigeria. I think from a gross margin standpoint, no, we’re not — we continue to expect gross margins to expand in the second half. So there’s no change in trend. I think there’s a little bit of variation based on seasonality between the quarters. But I think from an underlying standpoint, we continue to expect gross margin to be up in the second half.
Steve Powers: Okay. Thanks. I’ll pass it on.
Operator: Thank you. Our next question comes from Alexia Howard of Bernstein. Your line is now open. Please go ahead.
Alexia Howard: Good morning, everyone. Just a quick one for me. But thinking about the Investor Day next week. Can you clarify whether we’ll get a guidance range on either earnings per share, or adjusted operating profit for each of the two businesses for 2024?
Amit Banati: Yeah, that’s our intent. So I think our intent is to talk both give you a preliminary guidance given it’s early on 2024, talk about long-term growth rates across key measures.
Alexia Howard: And guidance for next year as well, at least preliminary guidance with the range?
