Decomposing the revenue guidance, pricing is clearly a key component of this plan. Its contribution will be a little bit less than we have seen in ’23, but it is higher than an average year. And particularly as we price away cocoa, chocolate will contribute to most of the pricing in ’24. Pricing, as we mentioned, presents a couple of challenges. One is potential customer disruption in Europe. We have planned for it. Part of it is also in the base of ’23. But while I feel positive and Dirk said more than half of the price is secured at this point, we cannot really say what is going to happen and particularly as we look into Europe, clearly we don’t control customer disruption. Having said that, I think it is important to realize that our brands are strong and that they drive significant traffic for retailers.
So couple that with the fact that prices is common to market and many competitors will have to price, I think we feel quite positive at this point in time, quite frankly. The second one is elasticity, for which I feel better because competitors, as I said, will have to price too, but also because our brands are unique and we have been investing quite a bit. We expect for the year volume to be mildly positive with a good contribution actually when we excluding the customer disruption. So at this point in time, given we don’t control the level to which customer disruption will affect the plan, we wanted to be a little bit on the cautious side. And look, reality is if we push this through and we are successful, most likely there will be revenue upside.
And so as I said, we feel good. Importantly, I want to say North America, we have very good plans as we go into 2024. And I think the lineup of all these plans plus the continuation of the momentum in the acquired platforms is good. I want to say Latin America in our case continues to be good. AMEA, despite some of the challenges, has a lot of momentum in India and China that will continue. And finally, I think if you look at Europe, excluding customer disruption, the underlying business and the categories are doing well. So I believe the year will play out well for us, depending obviously on the extent of customer disruption.
Andrew Lazar: Thanks so much.
Luca Zaramella: Thank you, Andrew.
Operator: Our next question comes from Ken Goldman, J.P. Morgan.
Ken Goldman: Hi, good afternoon.
Dirk Van De Put: Hi, Ken.
Luca Zaramella: Hi, Ken.
Ken Goldman: Hi. I just wanted to clarify a little bit about the EPS guidance. So it’s on algo of a $3.30 base, but it’s actually above algo, if we think about it on a like-for-like basis versus the $3.19, right? If you exclude gum from both 2023 and 2024. And please correct me if that’s not accurate. I’m just curious, what necessarily — what gives you the confidence it’ll be a little bit above algo just on that like-for-like basis and maybe how much of that underlying is sort of the elimination of some stranded costs as you think about it, that might just give a little bit more of a boost to the year than we might typically have.
Luca Zaramella: Yes, thank you for the question, Ken. We wanted to make sure it was clear that we are trying to eliminate all the stranded costs and so we really wanted to guide high single digit of the higher base. The confidence comes from the fact that, as I said, we are going to have, excluding the customer disruption, good volume momentum into the business and that provides leverage. We will continue pricing in a very disciplined manner and that will offset the material inflation that we see. Clearly, we will continue with cost, discipline and productivity. And the fact that we will eliminate 70%, 80% of the stranded cost into ’24 allows us to guide to a high single digit of a higher base. In all this algo, we are not going to have, I have to say, 20% A&C increase another year, but it will be most likely high single digit or double digits.
So we will continue investing across all the regions, across all the brands. And so we feel good about that. Remember finally that through the integration of Ricolino, there will be synergies coming to fruition. We are literally going live with SAP in few days and hopefully that will unlock both revenue and cost synergies for 2024.
Ken Goldman: Thank you. And then quick follow up. You mentioned disruption a little bit more in 1Q this year, with the understanding it’s quite early, is there any way we can get a little bit more of a quantitative sense just to how to think about some of the impact potentially on the top and bottom line in the quarter? I realize, like I said, it’s impossible to kind of completely forecast it at the time, but just any kind of magnitude at this point would be helpful as we think about our models, perhaps.
Luca Zaramella: Look, I think as you look at the Q1 revenue pacing, we are going to have a revenue maybe number that is a little bit below the full year algo. I think you’re going to be hopefully happy with the numbers you see across three regions out of the four. Europe is going to be more impacted in relative terms versus the impact that we have already in the base in ’23 in Q2, and most likely volume mix, excluding the customer disruption is going to be a nice number and positive. I believe total volume mix might be tilted to slightly negative because of the disruption, but I can’t go any further than that. We are in the middle of negotiations and conversations with retailers, and we have planned, we have a sense of what might happen, but time will tell exactly how we will land pricing in Europe.
