Steve Powers: Yeah, hey, thanks for the question. I wanted to talk about the route optimization efforts that you’ve had underway for some time now. And the progress on units per route per day metric as a symbolism of that has been pretty steady and impressive. I guess, would love some perspective on what you think may be sort of the optimal level for that metric or a high watermark? We’re trying to understand where the ceiling may be in terms of how much more runway there is on further optimization?
Robbert Rietbroek: Yes, that’s obviously core to our businesses to continue to drive units and revenue per route per day, and we’ve obviously disclosed a 5% and 8% increase this quarter. And we’re in the midst of the rollout of the automatic route optimization program 2.0 but we’re also combining that with new schedules. So we were traditionally a five-day week route organization from Monday through Friday. We’re currently implementing new schedules, some of four-day, some of 5-day schedules that could start on Tuesday or Wednesday and allow us to deliver on a Saturday or Sunday. The technology that sits at the heart of this work is enabling us to more efficiently build the driver routes. And as you know, those include both residential, commercial, but also our retail partners with the exchange drags.
So there is a natural cap to that. There’s only so much capacity available on the truck, but we are continuing to drive not only utilization on a daily basis but on a weekly basis by expanding the use of our branch assets and truck assets and production assets to a seven-day a week schedule currently.
Steve Powers: Okay. Thanks for that. I guess the second question, if I could the dispenser sell-through rates, you talked about this in the past, but they’ve been hovering around that kind of 1 million unit mark on a trailing 12-month basis for some time. And clearly, the retention rates are such that those – the incrementality of those sales are high. But I guess, is there — as you think about the progression of that metric, how — at what point do you really need to start to see that metric start to grow again that trailing 12-month metric grow again in order to achieve your Aspire 2 growth rates?
Robbert Rietbroek: Yes, we continue to see sales strong. This quarter, sell-through was up 3%, and we’re continuing to forecast around 1 million dispenser sales this year and what I would say is that about 650,000 of those usually are new users and 350,000 of those are replacement with existing users. So every year, as we sell approximately 1 million units. And as I said, we’re up 3% sell-through through from retail to consumer this year to date. That essentially are – that’s a new installed base that we can continue to serve over the years that follow. So we feel good about the trend. Our sell-through from ourselves to retail, obviously, significantly higher, but some of that is just replenishing the stock levels, and we see sell-through rate at the 3% level.
Steve Powers: Okay. Very good. Thank you.
Operator: Thank you. The next question comes from Pavel Molchanov from Raymond James. Please go ahead.
Pavel Molchanov: Thanks for taking the question. Getting back to the M&A topic that was covered just a minute ago. As you look at the tuck-in opportunities, which parts of North America are the most relevant for you to either establish a presence or bolster an existing presence.
David Hass: Yes. Thanks, Pavel. This is David. On the M&A side, again, we have a pretty diverse and wide reach with regard to our branch network. As we look to deals, we would love to be that precise. It tends to much more be the willingness or the succession planning of these generally entrepreneur or family-oriented operators. And so we definitely will look to geographies to see where there are relevant opportunities, but that has to obviously then match with the willingness of the seller and the willingness of the seller at the right price. And so we do analytically look across the board. Our presence is pretty wide, though, and we’re pretty pleased with that. But again, unfortunately or fortunately, it has to match with willingness and sort of timing of patients of that seller.
Pavel Molchanov: Yes. Understood. As you’re kind of crafting the strategy beyond 2024, do you anticipate maintaining the progressive dividend policy that you’ve had for the last three years? Or should we assume that it levels off at the current rate?
Robbert Rietbroek: Yes. At this time, the dividend policy reflects the Board’s view and investor feedback that we’ve received to-date. Obviously, we will have a different constitution of our balance sheet heading into 2025. I will yield to sort of decisions and collective thoughts of the Board as we head into 2025 planning, allow that to be communicated at their direction, obviously. But we’re quite pleased with the ability to return that money to share owners over the last three years. And then as our share repurchase program exists that helps obviously reduce the share count, reducing the notional exposure of the dividend flow itself. So again, we’ll yield to that as we head into 2025, but very proud of what we’ve been able to do with regard to returns for share owners to-date over the last three years.
Pavel Molchanov: Thanks very much
Robbert Rietbroek: Thank you, Pavel.
Operator: Thank you. The next question is a follow-up from Derek Lessard, an investor. Please go ahead.
Derek Lessard: Yes. Thanks for taking my follow-up. Again, the question pertains more pointed to the ARO 2.0. Just curious what the 2.0 entails and how much of that was driving the route efficiency gains. Now I think you did point to — you did talk lead to increased delivery days, but just curious what the upside is from that — from the 2.0?
Robbert Rietbroek: Yes, great question. It essentially a large part of it is associate feedback. So we’ve now been out there for a period of time. Every day, we’re making hundreds of thousands of deliveries and we’re getting route feedback, no different than what a Tesla would do with regard to its optimization, meaning, what’s going wrong with the route directions? What’s going wrong with boundaries? What’s going on with pinning a customer location? Why is it telling me to park here when the order needs to be delivered there? So it’s a lot of feedback It’s listening to associates who are the ones doing the frontline work for us and for our share owners every day. And so it’s a lot more constitution around involving that feedback. It’s not some massive technological change. It’s just associate feedback providing a better outcome. Again, the six day and seven day factors into that, but that’s not the technological side that causes us to call it 2.0, if you will.
Derek Lessard: Okay. Thanks for that.
Robbert Rietbroek: Thank you, Derek.
Operator: Thank you. There are no further questions. I will now turn the call back over for closing comments.
Robbert Rietbroek: Thank you for attending today’s call and for your continued interest in Primo Water. As I hope you can tell, our team is focused on driving sustainable growth. The path started is the right one to build on and overall, we believe we have the tools to win. We have a lot of work ahead of us, and I along with our team, are committed to taking Primo Water to the next level.
Operator: Thank you. Ladies and gentlemen, this concludes your conference for today. We thank you for participating, and we ask that you please disconnect your lines.
