Stefan Descheemaeker: Well, the first thing is we’ve lost some market share. And so definitely, there is a piece of that we want to regain. That’s the first thing. That’s within the area and that we think that with the programs we have, we can do this, but also, we believe that we have this program of the Must Win Battle, they’re supposed to grow in a disproportionate way compared to the others. That’s what we’ve been doing. One more thing you will see as well is we’re going to start in a very selective way to work on new categories on a country by country, very far from what happened something like 10 years ago, which was a bit of everything. But definitely, where we think that in a country, this category could be poultry, in some countries could be freeze dried and other.
We have the right to win. We’re going to do it. So there’s going to be a long-term investment. So that’s a combination of different things. When you think about poultry or you think about pizza, for example, definitely, you have a contest and competition with not only with frozen but also with chilled, so that’s going to be the framework for us. So definitely focused on the all Must Win Battles with RGM, with obviously A&P. And with that, we think that within this frame, we are going to gain market share. And then on top of that, we’re starting something which is, again, very focused behind new categories, and that will impact the frozen food, but definitely also above and beyond frozen food, which in and of itself, by the way, is doing well compared to many other categories.
Operator: Our next question comes from the line of Rob Dickerson with Jefferies.
Rob Dickerson: Stefan, maybe just to kind of follow up on what you just said. I think in the prepared remarks, you’d stated volume growth was kind of back for the broader frozen category in 12 out of 16 markets. I mean, clearly, I guess, a few things going on in Q3 that you’re not posting the volume growth, but then also it sounds like there is some incremental pricing that’s gone through the market. So like as we get through Q4, as you say, you think the volume trajectory improves, I mean, are you into Q1, like should we be thinking that hopefully, as you get toward the end of the quarter, that you start to see volumes stabilize, and therefore, there could actually be volume growth next year despite the pricing because of ongoing higher A&P, and Must Win Battles?
Stefan Descheemaeker: Well, to your point, I think we have — the programs we have with the combination of, let’s say, more stable macros, definitely, we believe that we’re going to come back to the previous algorithm, which was based on, obviously, volume growth, then you obviously higher sales then obviously definitely higher EBITDA and then double-digit EPS. So that’s definitely what we want to come back, with the combination as we said A&P, RGM, which is really something that we have — we’ve however, invested a lot and milder, let’s say, macro. That’s the idea. The concept of — do we believe that we’re going to gain market share and get back to volume growth next year? Absolutely. Where are they going to happen in which week? I can’t tell you that right now. But definitely, we’re very confident that we’re going to gain market share and we’re going to gain volume next year.
Rob Dickerson: All right. Super. And then, I guess, Samy, just on the gross margin, I think you had said Q4 gross margin kind of in line have gross margin essentially flat for the year. I think that kind of implies Q4 gross margins essentially flat. But at the same time, I’m hearing some stuff about pricing and RGM initiatives and sure there’s productivity. So I’m just curious kind of with some pricing coming through, it sounds like maybe that is clearly offsetting some higher costs. Otherwise, I kind of would think gross margin would be up.
Samy Zekhout: You have — I mean, you had a bit of an effect as well of mix because we had ice cream in Q3, and then we don’t have ice cream in Q4. When you look at the trends, if you look at first three quarters to the fourth quarter, but versus a year ago, you started to see some improvement there, which is going to comfort the projection of, let’s say, flat gross margin, I would say, for the year. So technically, the cycle has been that the first three quarters were slightly above 28%. And then effectively in Q4, it’s going to be slightly lower than that. But for an average of the year, that’s going to be flat versus a year ago. So it’s clearly definitely the investment we are making in terms of productivity, in terms of investment behind our core brand and particularly on mix on our core category.
And Must Win Battle in particular is going to start to pay off. We see effectively the trajectory starting to improve into the next year. But for this year, we definitely maintain our flat gross margin for the year.
Operator: Our next question comes from the line of Steve Powers with Deutsche Bank.
Steve Powers: On the gross margin, actually, while we’re here, you mentioned that 3Q came in ahead. Is that — what was the source of the upside? Was it better ice cream sales? Or were there other drivers of the upside versus your expectations?
Samy Zekhout: Well, this is expectation. I think we’ve been slightly higher, as you know, because effectively we had a bit of a better performance on the top line if you really look at that as expectation. And yes, ice cream has been doing really well there. There’s a mix factor there and the continuation effectively of the return that we are putting, we’re getting behind all of the cost savings and productivity initiatives. I mean, as you know, we’re putting a lot of focus and a lot of effort in COGS in particular. But it’s a combination of elements that we see. I mean that it’s not only just the saving in itself, but you really have a good combo on focusing on Must Win Battle, stepping up effectively the mix by investing behind the Must Win Battle. RGM starts to get in motion on that, which is giving us a bit of a breathing space there, which we expect to continue to maintain and again, securing our hypothesis and our projects for the year at about flat gross margin.
Steve Powers: Yes. Okay. Very good. And you mentioned 100% coverage and strong visibility on costs into ’24. Is there anything you can offer us in terms of an overall cost outlook? Or any color on expected kind of timing of the cost curve into the next year?
