Tim Knavish: Yeah. Hey, Kevin. Good morning. To your pruning question, I would say, we’re in early innings, frankly. What we’ve done so far is, I’d say some of the more obvious ones around the edge is, but businesses are on notice. My team knows that every business has to earn their right to stay in the portfolio and that’s small or medium or large even. But we did the obvious ones first, and we’re working through a number of other things. It’s a bit early to give any specifics, but early days there.
Vince Morales: And Kevin, let me just add there. I think this goes back to the May, CEO briefing, the focus for us is to make sure that we’re spending our energies, our bandwidth on organic growth. And if a business is not performing or too small to contribute meaningfully, then we’re going to shift that bandwidth to organic growth initiatives. So that’s, again, one of the critical focus is here as well as the financial returns, obviously.
Tim Knavish: Yeah. And the word is focus. I said that many times back in May, and I’d say, it’s daily within the company. We’re going to focus on the areas that we have the best right to win for the future and that are going to drive the best financial and growth performance for the future. To your second question, we are still – still a core part of our strategy is value creation, shareholder value accretive acquisitions because we still see many opportunities out there in the coatings space. But it’s been a little slower than historical just given the financing costs and also performance of some companies during these macro challenged environment, sellers, of course, sellers want to sell it to peak EBITDA. So I think there’s a little bit of a pause in closing deals, but we have a number in our pipeline.
We’re talking to potential sellers daily, weekly, monthly. So it’s still a core part of our strategy. And frankly, because these acquisitions add long-term earnings and long-term cash generation, it’s still our preferred – one of our preferred deployment opportunities. But as you heard us in our opening remarks, if those don’t happen, we will put that surplus cash to work in other ways, including repo.
Operator: Your next question comes from Aleksey Yefremov with KeyBanc (ph). Aleksey, please go ahead. Your line is now open.
Aleksey Yefremov: Thanks and good morning, everyone. Did you outperform in the Pro paint market in the U.S. this year and if so, by what magnitude and how do you think you could do relative to the market in the segment next year?
Tim Knavish: Well, we’re in — again, in architectural, we really run three very different architectural businesses depending on where you are in the world, right? So we talk a lot about our strength in Mexico. In Europe, we’re number one in 10 countries with a very strong position with the existing business model. And that business, we’re actually starting to see flat volumes despite everything that’s happening in Europe. So we see that the flat volumes, we see as a positive, given what’s happened over the last couple of years, with the potential that Europe has stabilized. In the U.S. specifically, it’s a very different business model where we are actually in the mode of building a business model for the future. And so, it’s early days in that journey where we’re building a model that’s brick-and-mortar like omni-channel model across our three channels, and we’re converting paint customers one by one by one.
You heard me say in the past that — for that model to prove success, it needs to grow high-single digits, low-double digits every quarter, and it will take many quarters to get significant scale there. Q3, you heard the earlier question, we did grow both volume and sales by low-single digits, a little lower than where I’d like. But given the macros in housing, I’d say that was to expect it. How we’re doing versus the market and peers? We’ll see as other people release their results. But our architectural U.S. business, we are building a business model for the future. And it’s a marathon, not a sprint. So we’re looking at it on a long-term business model foundation.
Operator: Your next question comes from the line of Michael Sison with Wells Fargo. Michael, please go ahead. Your line is now open.
Michael Sison: Hey, guys. Nice quarter. In terms of the fourth quarter, your outlook is for plus low-single digit sales growth to minus. I guess that implies some pricing, right? So the outlook for volume would be kind of like flattish to down mid-single digits. So can you maybe talk about what drives sort of the flattish or drive sort of the down? And then given where the interest rate environment is, do you think U.S. architectural demand next year could be up, down, flat? Thank you.
John Bruno: Yeah. Mike, this is John. Let me start, and I’ll have Tim and Vince add on here. So in terms of fourth quarter outlook and volume, the Performance segment, we expect volume to be positive. We’re still going to see good growth in aerospace and Comex as two key drivers there. The Industrial segment, we are expecting volumes to be lower, and that includes the assumption that Tim made earlier about the UAW impact. So if you — if we didn’t have a UAW impact, we must be much closer to being flat in volume in the Industrial Coatings segment.
Tim Knavish: Yeah. For Architectural Coatings U.S. next year, I feel good about the Pro based on two things, Mike. The continued growth an acceleration of the omni-channel that we’re building plus the backlogs that our customers continue to experience. DIY, it’s a big part of the business and if it stays at the current low level, that would actually be a positive for us as opposed to declining further. If there is just a little uptick in consumer spending and consumer remodeling, and I will remind everybody that a paint remodeling is the lowest cost home remodeling project you can do. So it will be the first one to start to recover. A little bit of volume recovery there would really help the total business in aggregate. So net-net, I’m positive on the Pro. I’m still questioning what’s going to happen on DIY for next year.
Vince Morales: And Mike, just one more thing on the DIY is, we do know many of the large DIY retailers have destocked in 2023. So we certainly haven’t had detailed conversations about their plans for 2024, but there was a pretty aggressive destock in 2023. So the sellout was much greater than the sell-in in 2023. And if that just normalizes on a year-over-year basis that will assist the pain producers.
Operator: Your next question comes from the line of Frank Mitsch with Fermium Research. Frank, please go ahead. Your line is open.
Frank Mitsch: Thank you and congrats, John on the promotion of VP, Finance reading a lot about wage inflation and higher accruals at PPG. So I assume it’s because you’ve been doing double duty for the last 2.5 months, so congrats on that. You commented that volumes in the fourth quarter, it seemed like we might finally get that to be positive if it wasn’t for the UAW strike. I’m curious as to given the nine quarters in a row of negative volumes, Tim, what your expectations are as you have an early read into 2024 in terms of volume growth at PPG?
